Payment Terms

Six multinationals to pay NN249 billion oil proceeds in January – NNPC

NNPC towers


A total of N249.3 billion for October 2021 domestic crude oil sales by six multinational oil companies operating in the upstream sector will be paid in January 2022, the Nigerian National Petroleum Company Limited said.

The NNPC made this known in its latest report on Nigeria’s crude oil exports and domestic sales of crude oil in October 2021. The report was obtained in Abuja on Thursday.

This came as the oil company revealed it would also deduct N 270.83 billion from what would be shared by the three levels of government at the Federal Accounts Allocation Committee meeting in January of the year. next.

He said the 270.83 billion naira was his shortfall in November 2021. The NNPC runs value deficits because of what it spends on the monthly subsidy of Premium Motor Spirit, commonly known as gasoline.

Regarding oil sales, he explained in the report that while October 2021 crude oil exports of 50,000 barrels under a production-sharing contract, valued at $ 4.18 million , were payable in November 2021, the national crude oil payment of October 2021 expected in January 2022 by the six companies is 249.3 billion naira.

The company further noted that domestic crude oil from October 2021 payable in January 2022 by NNPC met the 90-day payment terms, adding that the six companies were its joint venture partners.

He described the companies from which the funds were to include Chevron Nigeria Limited, Mobil Producing Nigeria, Shell Petroleum Development Company, MidWestern, Pillar and First Exploration and Production.

He said CNL would pay 2.268 million barrels of domestic crude valued at 73.85 billion naira, while MPN would hand over 123.22 billion naira for 3.8 million barrels of domestic crude oil.

The SPDC and MidWestern are said to pay for 828,556 and 100,000 barrels of domestic crude oil valued at 26.966 billion naira and 3.25 billion naira, respectively.

For Pillar and First E&P, the companies would pay 20,000 and 649,677 barrels of domestic crude oil valued at 650.91 million naira and 21.36 billion naira, respectively.

The report put the total volume of domestic crude oil payable by companies in January 2022 at 7.666 million barrels, while the value of the commodity was estimated at 249.3 billion naira.

Of the 270.83 billion naira deduction from what would be shared by FAAC in January 2022, the NNPC said the amount was an estimate of its shortfall in November of this year.

He said: “The estimated shortfall of N 270,831,143,856.56 is to be recovered from the December 2021 proceeding due to be shared at the January 2022 FAAC meeting.

“This shortfall consists of N 220,110,853,427.56 for November and N 50,720,290,429.00 reported for recovery in the FAAC report for December 2021.”

The NNPC was posting losses on a monthly basis due to its spending on oil subsidies, a development that had consistently reduced its remittances to the FAAC.

State governors had opposed the continuation of gasoline subsidies by the NNPC, but experts and unions have warned the government to be cautious as it plans to suspend the PMS subsidy scheme.

The NNPC remained the sole importer of oil in Nigeria for about four consecutive years and bore the cost of the PMS subsidy, being the supplier of last resort.

Other oil traders have stopped importing oil due to the volatility of the country’s exchange rate and the inability of traders to effectively access the United States dollar for PMS imports.