The Nigerian National Petroleum Corporation (NNPC) on Thursday told the Senate that the country’s debt to International Oil Companies stood at $5.1 billion.
The NNPC said that the $5.1 billion debt was accumulated from the Joint Venture Cash Call (JVC) business arrangement the country has with IOCs on oil exploration. The Chief Financial Officer (CFO) of NNPC, Alhaji Isiaka Abdulrasaq, who appeared before the Senate Committee on Gas explained how the debt was incurred.
The NNPC CFO told the committee that the Joint Venture Cash Call is business arrangement between the government of Nigeria and International Oil Companies . He noted while Nigeria controls 60% of the business venture, the IOCs control 40%. He said, “The problem however is that before this government came on board in 2015, Nigeria which holds 60% of shares in the joint business, for many years did not contribute its own required capital into it.”
Nigeria, he said, was “only collecting its equity share inform of revenues which made the country as at 2015 have $6.8bn unpaid capital into the venture.” He further explained that “The present government in 2016 succeeded in getting 35% discount from the unpaid capital amounting to $1.9bn from the unpaid capital, making the country to still owe the IOCs $5.1bn outstanding.”
Source: The Nation