NNPC to convert $5b JV areas to loan

The Nigerian National Petroleum Corporation (NNPC) has often reported in the past five months that it is now paying cash calls regularly, according to a report by Africa Oil and Gas. However, the report says there is still a legacy payable yet untouched and its JV partners say that is about $5Billion. Although NNPC argued that it is about $3.5Billion yet, the OPTS (which consists largely of NNPC’s major partners), maintains it is $5Billion. “The disparity is the difference between what’s approved after reconciliation and what has not been mutually agreed”, says the report.

NNPC’s current management proposed to convert the debt into an interest bearing loan with a 10 year tenure “and the industry seem comfortable with it”, according to report. Continuing the report says “It’s a win-win situation”. According to it, NNPC’s move makes the JV partners look forward to a settlement.

“There is suddenly a way out of the bind, because previously, it was clear that government wasn’t committed to pay and no one saw a way out”. Experts say on the flip side, the agreement, when it is finalized, makes NNPC look more credible and less like a rogue company. “All these years it has been seen as unwilling to settle its debts. Most of the years that the debt had been owed, it wasn’t even accruing interest”, report says