Following last week’s reports that Nigeria is asking international oil companies to pay up about $62 billion accrued interests from years of non compliance to a 1993 contract law, the country’s Minister of Justice, Abubakar Malami SAN, disclosed this over the weekend that we have begin  negotiation.
ExxonMobil Corp, Chevron Corp, Total SA, Royal Dutch Shell, and Eni SpA were asked to pay up $62 billion which they had allegedly failed to pay overtime. These companies are in-charge  for pumping most of the country’s crude oil output.
In 1993, when Nigeria entered into the contracts with these IOCs to develop the country’s oil fields, the revenue sharing model was set at 20% for the government and 80% for the companies. However, a key clause specified that Nigeria would receive more share from oil revenues generated by them should global oil prices ever exceed $20 per barrel.
Between then and now, oil prices have risen and fallen and currently stands above $20 per barrel. Yet, Nigeria claims the oil companies have persistently refused to adhere to the specifics of the contract law.
Last year 2018, the Supreme Court ruled in favour of Nigeria’s demand for more share from oil proceeds. However, the oil companies kicked against the demand with counter lawsuits, arguing that the government does not have the right to ask them to pay for accrued interests. They also argued that they “weren’t party to the 2018 case, they shouldn’t be subject to the ruling
It appears that IOCs’ protests worked, seeing as Nigeria is now willing to negotiate. However, as the Justice Minister clarified, the outcome of these negotiations is yet to be seen.