The Federal Government, through the Nigerian National Petroleum Company Limited (NNPC), has paid $2.44bn cash call obligations to multinational oil companies which are joint-venture partners of the state-owned oil company.

In Nigeria, cash calls are requests sent by joint venture operators to NNPC for payment of its 55 ? 60 percent share in the light of anticipated future capital, operating expenditures or need of additional capital contributions.

The Federal Government, through the NNPC, had over the years piled up unpaid bills, referred to as cash calls, which it was obliged to pay the IOCs with which it had joint ventures for oil exploration and production.

Data sourced from the latest Nigerian Extractive Industries Transparency Initiative (NEITI) report showed total cash payment to JV operators stood at $2.4 billion as at 2023.

These payments are treated as first-line deductions by the NNPC from the sales proceeds of crude oil and gas. The Joint Venture Cash Call Account (JVCC) warehouses Cash call funding inflows from the JV proceeds accounts and subsequently transfers these to the respective JV partners.

Details of outflow from Joint Venture Cash Call Bank Account sourced from NEITI showed Chevron Nigeria Limited received the highest cash call payment in 2023 of $374.92 million; Total Exploration and Production Nigeria follows closely with $313.48 million; ExxonMobil received $263.13 million.

Similarly, NNPC/AITEO JV and NNPC/Shell Petroleum Development Company/Elf Petroleum Nigeria Ltd/Nigerian Agip Oil Company Ltd (NAOC Ltd) JV received $199.45 million and $197.49 million, respectively.

Partnerships such as NNPC/NEWCROSS/EROTON reported a lower figure of $0.19 million. One particularly noteworthy entry in the cash calls is the NNPC (UNCLASSIFIED) category, which alone received $733.61 million.

Further findings showed Nigeria?s cash call liabilities declined by 37 percent from $1.3 billion in 2022 to $815.6 million in 2023.

?The decline of US$485.57 million (37%) was due to repayment through the Repayment Agreements,? NEITI said in its latest report.

NEITI added that, ?NNPC Limited claimed that reconciliation is ongoing with the NUPRC to ascertain any 2023 outstanding liabilities. However, the Nigerian Upstream Petroleum Regulatory Commission is yet to confirm this position.?

Experts encouraged the government to continue in the repayments of its cash call debts to the five IOCs, noting that the delay in settling the debts had contributed to slowing oil sector investments in Nigeria.

?Personally they have moved to where they should have been a while ago. Until NNPC is properly run her potential would be stunted,?Jide Pratt, country manager of Trade Grid said on X. (BusinessDay)

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