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The Nigerian National Petroleum Corporation (NNPC) has repaid most of the arrears it owes to international oil companies for joint venture operating expenses, recently repaying US$3 billion to Exxon and Shell, Bloomberg reported on Tuesday, citing a statement from the Nigerian state oil firm.
NNPC works in joint ventures with the major international oil producers in Nigeria, including ExxonMobil, Chevron, Shell, Total, and Eni. However, the stretched finances of the Nigerian company has led to arrears in its payments for contributions to the operating expenses of those joint ventures.
Nigeria still owes US$1.7 billion to the oil majors, but it has now repaid most of its dues.
In the latest installment of US$3 billion, Exxon received US$2.3 billion, while Shell received US$455 million, according to the statement reported by Bloomberg.
NNPC owes Shell another US$917 million and still must pay US$385 million to Eni, US$304 million to Total, and US$55 million to Chevron.
The payments to the oil majors could be a sign that the Nigerian company has shored up finances in recent years, as it also said in a rare financial release last week.
Last week, NNPC said in its second financial statement in over four decades that its losses shrank by 99.7 percent in 2019, while “the outlook for 2020 looks promising” as the state oil firm continued to slash costs.
NNPC said in its audited financial statement for 2019 that its loss last year fell to just US$4.4 million (1.7 billion Nigerian naira), compared to a loss of US$2.1 billion (803 billion naira) in 2018.
Earlier this year, NNPC published its 2018 audited financials as part of a drive for transparency at the company.
The significantly decreased losses in 2019 were mainly the result of cost optimization, operational efficiency, and renegotiation of contracts, NNPC’s chief financial officer Umar Ajiya said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.