FG reaches settlement with oil firms on owed payments -FT

The Federal Government has reached an “outline settlement” worth $5 billion with five oil majors to cover outstanding payments for joint exploration and production, the Financial Times said on Tuesday.

The OPEC member’s state oil firm NNPC has over years piled up unpaid bills, so-called cash calls, that it was obliged to pay under joint ventures with Western oil firms, with which it explores for and produces oil.

Minister of State for Petroleum Resources Emmanuel Ibe Kachikwu said Royal Dutch Shell, Exxon Mobil, Italy’s ENI, Chevron and France’s Total had “accepted” the $5 billion deal, according to the FT’s website.

Shell and Chevron declined to comment in response to enquiries by Reuters. The others were yet to respond.

The payments would be made in the form of new oil production, the FT said, quoting the minister and “people close to Western companies”. There would also be a one-off cash payment.