Recent changes from the Central Bank of Nigeria (CBN) have modified restrictions on repatriating foreign exchange proceeds from oil and gas exports by International Oil Companies (IOCs) operating in Nigeria.
In a circular issued by Dr. Mahmoud Hassan, the Director of Trade and Exchange at CBN, IOCs are now permitted to utilize oil and gas export proceeds within the country for settling petroleum tax obligations and contractors’ invoices.
In a previous circular from February 2024, CBN had specified that only 50% of oil and gas export proceeds could be immediately withdrawn.
Additionally, CBN mandated that revenue from IOCs must remain within the country for a minimum of 90 days before being repatriated.
However, the updated circular now states that companies can utilize the 50% that is required to be held in the country over the stipulated period.
“The initial 50% of repatriated export proceeds can be pooled immediately or as needed.
“Banks are allowed to request cash pooling in advance of the anticipated receipt date, with the required documentation for CBN approval.”
“The remaining 50% of repatriated export proceeds can be used for fulfilling financial obligations in Nigeria within the prescribed 90-day timeframe.”
Aside from meeting tax obligations and contractor payments, the CBN clarified that companies can also use these repatriated proceeds for purposes such as paying royalties, cash calls, loan repayments, and engaging in forex sales within the Nigerian Foreign Exchange Market.