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
FACTS:
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Original total sum owed is $6.8 billion
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Present settlement value is $5.1 billion
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Amount will be settled through crude oil sales over five years
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The settlement could unlock investment
CONCLUSION:
“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.
