AGS NEWS – The Central Bank of Nigeria (CBN) has implemented new regulations barring International Oil Companies (IOCs) from transferring all their foreign exchange earnings to their parent companies abroad.

Under the new policy, which takes immediate effect, foreign oil firms are restricted from repatriating 50% of their proceeds initially, with the remaining half permitted after a 90-day period.

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A circular issued by the CBN’s Director of Trade and Exchange, Hassan Mahmud, emphasized the importance of ensuring that IOCs have access to their export proceeds to fulfill their offshore obligations.

The CBN indicated that it would maintain this policy to minimize any adverse impact on the liquidity of Nigeria’s foreign exchange market.

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The circular states:

“The Central Bank has observed that proceeds of crude oil exports by International Oil Companies (IOCs) operating in Nigeria are transferred offshore to fund parent accounts of the IOCs (otherwise referred to as cash pooling).

This has an impact on liquidity in the domestic foreign exchange market. Banks are allowed to pool cash on behalf of IOCs, subject to a maximum of 50% of the repatriated export proceeds in the first instance.

The Balance 50% may be repatriated after 90 days from the date of inflow of export proceeds.”