NNPC and Oil Companies Sign Agreement to end JV Payment

The Nigerian National Petroleum Company (NNPC) signed an agreement to exit the Joint Venture Cash Call (JVC) with some international oil companies. The agreement was signed between the Federal Government and Shell, Chevron, Agip, Total, and Oando.

Nigeria owes an estimated $6.8 billion accumulated over 14 years however secured a discount of $1.7 billion, leaving a debt of $5.1 billion to be repaid. The Minister of State for Petroleum, Ibe Kachikwu, who signed on behalf of the Federal Government, expressed that the signage would bring more investments into the country.

Maikanti Baru, Group Managing Director of the NNPC, said the agreement was aimed at addressing long standing issues of unpaid cash call arrears, under-funding the joint venture and the burden of monthly payments by the Nigerian government.
He said inability of the NNPC to regain technical costs had been a major reason for the accumulation of the arrears over time. Under the new funding model, government would continue to receive royalties, taxes and profit from its equity share of Joint Venture oil and gas production. Signing of the agreement would restore investor confidence and provide opportunity for NNPC and joint venture partners to easily raise capital to finance oil and gas operations.