OML 125 is one of the 6 offshore oil blocks operated by Nigerian Agip Exploration (NAE), a subsidiary of Eni S.p.A. It is located approximately 40 km offshore from the Nigerian coast on the western edge of the Niger Delta, at a water depth of 550 m to 1,100 m. OML 125 contains three fields: Abo, Abo North, and Okodo. Abo came onstream in 2003, becoming Nigeria’s first-ever deepwater producer.
In reviewing payments to government data, it was discovered that in-kind payment (payment in delivered oil rather than cash) of 42,338 kilobarrels of oil equivalent was made by Eni to the Federal government in 2016 for OML 125. The Federal government allows payment of tax through the delivery of oil instead of cash.
There are instances where government undervalue the in-kind payments they receive for oil produced. Why does the Nigerian government continue to receive in-kind payments instead of cash payments from international oil companies for the crude oil produced?
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![OML 125 Oil block](https://policyalert.org/wp-content/uploads/2022/12/OMl-125-BLOG-FEATURE.jpg)