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The Central Bank of Nigeria (CBN) has announced the relaxation of restrictions on the repatriation of oil and gas export proceeds by International Oil Companies (IOCs).
In a recent development, the CBN stated that IOCs are now permitted to utilize oil and gas export proceeds within the country for various purposes, including settling Petroleum Tax obligations and contractors’ invoices.
Previously, the CBN had mandated that only 50 percent of oil and gas export proceeds could be repatriated immediately, with the remaining half required to be held within the country for a minimum of 90 days before being repatriated.
However, the latest circular from the CBN clarifies that the 50 percent held in-country for the specified period can now be utilized by the companies for approved purposes.
Dr. Mahmoud Hassan, Director of Trade and Exchange at the CBN, announced this development in a circular, stating: “The initial 50 percent of repatriated export proceeds can be pooled immediately or as required. Banks may submit requests for cash pooling in advance of the expected receipt date, supported by the necessary documentation for approval by the CBN.”
Furthermore, the circular explains that the remaining 50 percent of the repatriated export proceeds can be utilized to fulfill financial obligations within Nigeria during the prescribed 90-day period.
In addition to using these repatriated proceeds for tax obligations and contractor payments, the CBN outlined that they can also be utilized for royalty payments, Cash Calls, loan repayments, and foreign exchange sales in the Nigerian Foreign Exchange Market.
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