International Oil Companies operating in Nigeria could inject up to 50 per cent of their oil and gas export proceeds in the Nigerian foreign exchange market through direct sales and settlement of several domestic financial obligations.yesterday permitted IOCs to use 50 per cent of their oil and gas export proceeds to settle specified local transactions and for sale to the Nigerian Foreign Exchange Market .
However, the balance 50 per cent of the repatriated funds could now be used to settle financial obligations locally, whenever required, during the prescribed 90-day period. “The initial 50 per cent of the repatriated proceeds can be pooled immediately or as at when required. Banks may submit the request for cash pooling ahead of the expected date of receipt, supported by the required documentations, for approval by the Central Bank of Nigeria.
The CBN stated that it had observed that proceeds of oil exports by IOCs operating in Nigeria are transferred offshore to fund parent accounts of the IOCs . This had impact on liquidity in the foreign exchange market.“While the CBN strongly supports the need for IOCs to have easy access to their export proceeds, particularly to meet their offshore obligations, this must be done with minimal negative impact on liquidity in the Nigerian foreign exchange market.