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FT: Western oil companies reach $5B deal with Nigeria

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Nov. 8, 2016 10:23 AM ET|By: Carl Surran, SA News Editor

Nigeria’s government has reached an outline settlement to resolve a dispute with western energy firms that would pay the companies $5B to cover exploration and production joint venture costs in the country, Financial Times reports.

Nigeria’s petroleum minister tells FT that Royal Dutch Shell (RDS.A, RDS.B), ExxonMobil (NYSE:XOM), Eni (NYSE:E), Chevron (NYSE:CVX) and Total (NYSE:TOT) accepted the settlement of costs incurred during 2010-15, and hopes a deal can be finalized by year-end.

The settlement, which would be a haircut on the $6B-plus the western companies claim they are owed by Nigeria, needs the approval of two government bodies and final signoff from Pres. Buhari.

E&P costs are supposed to be split in the partnerships between the two sides, but western companies have accused Nigeria of failing to pay its portion of the expenses, which has caused the companies to hold back on investment.

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