SAN FRANCISCO, May 02, (THEWILL) – The Federal Government said it had released $400 million to settle the outstanding Joint Venture cash call debts owed to International Oil Companies (IOCs).
This was revealed by the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, who made this known in Houston, United States, while speaking to journalists on the side-lines of the ongoing 2017 Offshore Technology Conference (OTC)on Tuesday.
Kachikwu said the money was paid to the IOCs last week explaining that the payment was part of a $1.2 billion cash call debt owed the IOCs in 2016 adding that the balance would be defrayed within a year.
The minister said it was different from the discounted $5.1 billion cash call arrears it negotiated in December 2016 with the IOCs.
“At the time that we did the joint venture review that we came up with, we had two components to it. The first was the $6.8 billion arrears covering about six years which were owed the oil companies,” he said.
“In our negotiations, we were able to trim that down to about $5.1 billion; so, we knocked off $1.7 billion out of it and then spread the $5.1 billion over the next five years. This is to be paid from incremental production, not from existing production.
“In other words, they will have to go and find new oil and from that new oil, we pay that money because we didn’t want to imperil the 2.2 million barrel that everybody was already used to.”
