How Nigeria’s $5.1bn debt to oil majors has stalled $15.5bn foreign investment
Failure of Nigeria to settle about $5.1 billion debts it owes international oil companies has driven away foreign investments of more than $15 billion, so said the Minister of State, Petroleum Resources, Dr. Ibe Kachikwu.
He said that Nigeria is expected to pay the first instalment by the end of April 2017, in line with the agreement reached in 2016, but the fund is yet to be made available.
Kachikwu said settlement of the debt could unlock investments of as much as $15 billion by the international companies, noting that the companies to be settled include Exxon Mobil Corporation and Royal Dutch Shell.
According to him, the energy companies are expected to reciprocate “by ensuring that they ramp up investments in the country’s oil and gas sector.” Nigeria reached the repayment deal in November with producers including Exxon, Shell, Chevron Corporation, Total SA and Eni SpA that pump about 80 percent of the country’s crude in joint ventures with the state-owned Nigeria National Petroleum Corporation, NNPC.
The debt, incurred from 2010 to 2015 due to Nigeria’s inability to make its share of capital contributions to the joint ventures, will be settled through crude sales over five years and will be interest-free, Kachikwu in earlier statement maintained.