Following last week’s agreement with International Oil Companies (IOCs) on payment for discounted $5.1 billion cash call arrears, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu said the debt would paid off within five years.
The minister who spoke at the inaugural meeting of the National Council on Hydrocarbon in Abuja on Tuesdaysaid that within the agreement the payment from incremental oil production will not affect Nigeria’s budget production benchmark of 2.2 million barrels per day (mbd).
While he failed to be exact on when the payment would commence, he explained that the repayment timeline was part of the concessions the government got from the IOCs for discounting a whopping $1.7 billion from the cash-call arrears.
He said last week at the 72nd National Economic Council (NEC) meeting that through negotiations with the IOCs, the $6.8 billion past due Cash-calls burden on the Federation was reduced to $5.1 billion, to be paid on an improved oil output.
He added that the discount translates to almost N8 billion in savings to the country.
“The first concession obviously is the fact that the country got a discount of $1.7 billion, and that is going to be paid over a period of five years and it will be paid from incremental volume of production and so we are not lynching into our 2.2mbpd to be able to pay for that.
“I think literally when you look at it, it almost translates into fiscals of N8 billions in savings for the government which is very good,” said Kachikwu.
On the current oil production level following recent attacks by millitants in the Niger Delta, he explained: “Still not where we should be. These days I am almost cautious of giving figures so I don’t attract attention unnecessarily but obviously the Forcados incident did impact us, but my guess is that we are moving closer to 1.9mbpd at this point.”
He said President Muhammadu Buhari approved the formation of the National Council on Hydrocarbon and that its responsibilities will be advisory.
“It is a fact and ideas gathering team and so everybody present their opinions, both the military, traditional rulers and stakeholders who will contribute ideas into the Hydrocarbon Council.
“So, we are basically telling Nigerians, this is your product, this is your economy and issues, what ideas do you have in terms of engagement of communities to help them become part of the policy making process,” Kachikwu noted.
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