FG pays $2.4bn cash call obligations to IOC, others

By Seun Ibiyemi

The federal government, through the Nigerian National Petroleum Company Limited (NNPC), has fulfilled its cash call obligations amounting to $2.44 billion to multinational oil companies that are joint-venture partners with the state-owned oil company.

In Nigeria, cash calls represent requests made by joint venture operators to NNPC for the payment of its 55-60 percent share, which is necessary for anticipated future capital and operating expenditures or additional capital contributions.

Over the years, the Federal Government, via the NNPC, accumulated unpaid cash call obligations to the International Oil Companies (IOCs) involved in joint ventures for oil exploration and production.

According to the latest report from the Nigerian Extractive Industries Transparency Initiative (NEITI), the total cash payment to joint venture operators reached $2.4 billion as of 2023.

These payments are classified as first-line deductions by the NNPC from the proceeds of crude oil and gas sales.

The Joint Venture Cash Call Account (JVCC) manages cash call funding inflows from the joint venture proceeds accounts and subsequently transfers these funds to the respective joint venture partners.

Details from the NEITI report indicate that Chevron Nigeria Limited received the highest cash call payment in 2023, totaling $374.92 million.

Total Exploration and Production Nigeria followed with $313.48 million, while ExxonMobil received $263.13 million.

Additionally, the NNPC/AITEO joint venture and NNPC/Shell Petroleum Development Company also received significant payments.