(Ecofin Agency) - The Minister of State for Petroleum Resources, Emmanuel Kachikwu (photo), on Tuesday, disclosed that the Federal Government has released $400 million to pay Joint Venture (JV) cash call debts of $1.2 billion owed to International Oil Companies, last year.

Speaking on the sidelines of the ongoing 2017 Offshore Technology Conference in Houston, U.S, he explained that the payment was the first tranche of the debt and the balance will be settled within a year.

“We have made provisions through the Central Bank for the payment of the balance on a monthly basis. This will stimulate IOCs to pick up their appetite to invest in existing and new projects in the country,” Kachikwu said, adding that with the new development, the country’s oil production could increase by 700,000 barrels per day (bpd) by 2018. The IOCs involved in the JV cash call are ExxonMobil, Shell, Nigeria Agip Oil Company, Chevron and Total.

According to the oil minister, the $1.2 billion debt differs from the $5.1 billion cash call debts negotiated in December 2016 with the foreign companies. “At the time that we did the joint venture review that we came up with, we had two components to it. The first was the $6.8 bn arrears covering about six years which were owed to the oil companies. In our negotiations, we were able to trim that down to about $5.1 bn; so, we knocked off $1.7 bn out of it and then spread the $5.1 bn over the next five years. This is to be paid from incremental production, not from existing production,” he stated.

Anita Fatunji