Minister of State for Petroleum Resources, Dr Ibe Kachikwu, says the discounted $5.1 billion cash-call debt owed International Oil Companies (IOCs) will be paid off within five years.
Kachikwu said this in Abuja on Tuesday while speaking to newsmen after declaring open the National Council on Hydrocarbons.
Known as the Joint Venture Cash Call (JVC) debt, the nation owed the IOCs $6.8 billion but got a discount of $1.7 billion leaving a debt of $5.1 billion to be repaid.
According to the minister, the agreement states that the payment from incremental oil production will not affect Nigeria’s budget production benchmark of 2.2 million barrels per day (mbpd).
“The first concession obviously is the fact that the country got a discount of $1.7 billion, and that is going to be paid over a period of five years.
“It will be paid from incremental volume of production and so we are not lynching into our 2.2mbpd to be able to pay for that.
“I think literally when you look at it, it almost translates into fiscals of N8 billion in savings for the government which is very good,” he said.
He explained that the responsibilities of the newly-inaugurated council would be advisory.
He said the council would act as a fact and ideas gathering team where all stakeholders: military, traditional rulers and ordinary Nigerians would contribute to the policy-making processes of the region.
In a related development, the minister also inaugurated the newly-constituted Boards of the Petroleum Products Pricing Regulatory Authority (PPPRA), Petroleum Equalisation Fund (Management) Board, PEF, and the Petroleum Training Institute (PTI).
Speaking at the inauguration ceremony he said the boards were formed at a time when the global petroleum industry was witnessing a downturn in fortunes.
Kachikwu said the composition of the boards was made up of selected individuals versed in experience and knowledge to guide the three parastatals into harnessing their potentials and fulfilling the nation’s expectations.
“For PPPRA, the expectation of the board is to provide the necessary stairs and guidance to the management on ensuring the maintenance of national petroleum products sufficiency and ensure the growth of the petroleum products strategic reserves.
“For PEF, the expectation from the members of the board is for them to ensure that the automated product tracking system from depots to stations is completed nationwide and every molecule of petroleum product is tracked to the retail station.
“For PTI, the expectation from the members of the board is for them to superintend the transformation of PTI to world class oil and gas training institute.
“Institutes that run commercially viable courses and grow the number of high value clients within the industry and make it a cynosure institution in the continent.’’
