SAN FRANCISCO, July 24, (THEWILL) – The Nigerian National Petroleum Corporation (NNPC) Wednesday said it has suspended cash call repayments to Eni for three months, and will not renew some oil licences held by the Italian oil company.
The NNPC owes billions of dollars to international oil companies, including Eni, its share of operating costs for their joint ventures. Of the original $5 billion owed two years ago, repaid through a system known as cash calls, about $3 billion is now outstanding.
Reuters, which first reported the development said, the NNPC has withheld 3 months’ payment to Eni over a set of disputes. Delayed payments for the cash calls have hindered development of some of the country’s oil assets.
Among the issues raised by NNPC, according to report are that Eni’s licences for some oil assets have expired, but Nigeria’s government does not plan to renew them as it wants the state oil firm to take over.
The government did not specifically name the assets it is taking over from Eni.
“The failure to pay cash call arrears in the last three months was deliberate and meant to ensure that the issues surrounding the agreement (are) settled,” the NNPC said in a statement, adding it has the money to pay and expects a resolution by the end of the week.
In its statement, NNPC also urged Eni to complete the first phase of rehabilitating Nigeria’s Port Harcourt refinery by the scheduled date of October, the statement said.
The statement added that Eni’s executive vice chair for sub-Saharan Africa, Brusco Guido, said the Italian firm had various challenges and asked for NNPC’s help to resolve them and meet its 30% annual growth target for its joint ventures’ oil production.