NNPC repays $3.081bn of Joint venture cash debt

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Mordi chukwunonso Esther

The Nigerian National Petroleum Corporation (NNPC), has repaid $3.081 billion from the $4.689 billion cash call arrears it negotiated with its Joint Venture (JV) partners, leaving an outstanding indebtedness of $1.609 billion.

In a report published recently, the NNPC stated that the repayments, which stood at 68.69 per cent of the total; and outstanding indebtedness, which stood at 34.31 per cent, were as at October 2020.

While the NNPC confirmed that it had cleared the cash call indebtedness to Mobil Producing Nigeria (MPN), it noted that it was working towards clearing the arrears owed Shell Petroleum Development Company (SPDC), Chevron Nigeria Limited (CNL), Total Exploration and Production Nigeria (TEPNG) and Nigeria Agip Oil Company (NAOC).

Specifically, the report disclosed that as at October 2020, the NNPC owed SPDC $917.205 million; CNL $55.479 million; TEPNG $265.011 million and NAOC $370.925 million.

The NNPC further explained that in the case of SPDC, repayment was from the price balance distribution on Project Santolina; while in the case of CNL, repayment was from price balance distribution on Projects Cheetah and Falcon.

“NNPC has fully repaid its cash call arrears to MPN and all incremental barrels have reverted to base,” the NNPC reiterated.

As at the commencement of 2020, precisely in January 2020, the NNPC stated that of the $4.689 billion JV cash call debts, $2.79 billion was repaid while $1.89 billion was outstanding.

SPDC, CNL, TEPNG and NAOC’s outstanding, as at January 2020, stood at $917.205 million, $158.309 million, $390.59 million and $433.41 million respectively.

The NNPC, in 2016, signed a Cash-Call Repayment Agreement with its JV partners to defray cash-call arrears within a period of five years. This came after many years of its indebtedness to its JV partners over its failure to meet up with its cash call obligation.

In addition, providing a summary of revenue from crude oil and gas liftings for October 2020, the report stated that the NNPC earned $769.28 million from crude oil and gas sales, a decline by 7.71 per cent compared to $833.62 million recorded in September 2020.

Giving a breakdown of the figures, the report noted that the NNPC earned $707.547 million from total crude oil sales, compared to $431.589 million in September 2020.

Giving a breakdown of some of the components of crude oil sales, the NNPC stated that it earned $73.09 million from crude oil exports, compared to $12.38 million in September 2020; while earnings from domestic crude oil sales and Modified Carry Agreement (MCA) stood at $416.975 million and $58.925 million respectively.

On the other hand, the report noted that total gas earnings stood at $61.736 million in October 2020, compared to the previous month’s gas earnings of $135.349 million.

Furthermore, the NNPC also disclosed that it spent N3.676 billion on pipeline repairs and management for the month of October 2020.

Giving a breakdown of the spending, the NNPC stated that pipeline and other facilities repairs gulped N2.173 billion; Marine distribution cost the country N951.484 billion; while strategic holding gulped N551.799 million.

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