Oct 20, 2020
Nigeria Pays Oil Majors $3 Billion, Moving Closer to Ending Dues
(Bloomberg) -- Nigeria reimbursed oil companies including Exxon Mobil Corp. and Royal Dutch Shell Plc $3 billion, moving closer to clearing operating expense arrears owed since 2010.
The payment is being settled through a five-year crude oil sales deal agreed in 2016, Nigerian National Petroleum Corp. said in a statement. While a majority has been paid as of August, there’s still about $1.7 billion outstanding. Exxon has got $2.3 billion, clearing all dues. Shell has received $455 million, but is still owed $917 million.
NNPC operates joint ventures with producers including Exxon Mobil, Shell, Chevron Corp., Total SE and Eni SpA that pump about 80% of Nigeria’s output. Lower revenue and demands for other payments hampered NNPC’s ability to contribute its share of expenses from 2010 to 2015, leading to the arrears.
It still owes Eni $385 million, Total $304 million and Chevron $55 million, according to the statement.
The oil majors didn’t immediately respond to requests for comments.
The Nigerian state-run company on Oct. 15 published audited accounts for only the second time in its 43-year history. The report showed its annual loss shrank to just a few million dollars last year from about $2 billion in 2018 as it slashed costs across its operations.
READ: Nigeria’s Oil Giant Pares Annual Loss After Slashing Costs
The payments to the oil companies suggest NNPC may finally be turning a corner with profit and cash. That’s good news for Nigeria’s oil industry, which generates about half of all government revenue. But like oil companies around the world, NNPC is also facing weak global demand because of the coronavirus and new restrictions to contain it.
©2020 Bloomberg L.P.