Nigeria has reached a $5.1b settlement to reimburse foreign oil companies, including Exxon Mobil Corp. and Royal Dutch Shell Plc, for past operating costs, Bloomberg reported.
Nigeria’s Oil Minister, Emmanuel Ibe Kachikwu, said the agreed amount, which is $1.7b less than the total amount owed for operations between 2010 and 2015, would be paid within five years, interest free. Under the arrangement, payment will be in the form of crude-oil cargoes, but only when Nigeria’s production exceeds 2.2mb/d, informed Reuters.
“The barrels to pay those [debts] will come from incremental barrels generated by the oil companies, not from the current 2.2mb/d production,” stated Kachikwu. “In other words, if we do not meet those thresholds we will not pay the $5.1 billion,” he added.
The minister confirmed that Royal Dutch Shell, Exxon Mobil, Italy’s Eni, Chevron, and France’s Total had “accepted” what he described at the time as an “outline settlement”. Exxon, Shell, Chevron Corp., Total SA, and Eni SpA are owed money for costs incurred from 2010 to 2015, in addition to approximately $2.6b in debt that has accrued in 2016.
The Nigerian Petroleum Ministry has for more than a year been trying to reduce its financial obligations, which have accumulated over several years, is still working to repay the sums.