Nigeria has reached a deal to pay $5.1 billion to oil majors including Exxon Mobil Corp. and Royal Dutch Shell Plc for past operating costs.
The amount is $1.7 billion less of what was previously owed
Original total sum owed is $6.8 billion
Present settlement value is $5.1 billion
Amount will be settled through crude oil sales over five years
The settlement could unlock investment
“What we have been able to put together has enabled us to shave about $1.7 billion in savings for the federal government from the $6.8 billion that was owed,” he said. “The barrels to pay those will come from incremental barrels generated by the oil companies, not from the current 2.2 million-barrel-a-day production.
“In other words, if we do not meet those thresholds we will not pay the $5.1 billion,” said Petroleum Minister Emmanuel Kachikwu.
Kachikwu sees oil production rising to 2.5 million barrels a day by 2019 and 3 million by 2021. The country also plans to reduce production costs to $18 a barrel in two years from $27 now, and to $15 a barrel in four years.