The Nigerian National Petroleum Company (NNPC) Limited yesterday reacted to a report on its plans to secure a fresh $2 billion oil-backed prepayment loan amid fuel scarcity in the country. Reuters had reported on Tuesday, that the firm plans to achieve the deal in two months, quoting the Group Chief Executive Officer, NNPCL, Mele Kyari, as saying the new financing would allow investment in its business.
“We have no problem covering our gasoline payments. This is just money for normal business and not a desperate act,” Kyari told Reuters.
But reacting to the report, the Chief Corporate Communications Officer, NNPC Ltd , Olufemi Soneye, neither gave a clear refutal or admittance to the report. Soneye, in response to enquiries by The Nation on the fresh $2 billion loan being sought by the Company, said: “when we are ready to proceed with any of the initiatives mentioned, we will make an official announcement. As a global energy company, we need funding to undertake aggressive drilling campaigns. Naturally, we will require financing for our high capital expenditure projects. Our financing arrangements are typically announced through our financial advisers and arrangers. When the time comes, new financing transactions will be announced to the market.”
According to the Reuters report, Kyari said the company wanted the new loan against 30,000-35,000 barrels per day of crude production, though he declined to say how much money it sought.
“It will be syndication with critical but regular partners who have been in business with our company to forward the cash,” the media outlet quoted Kyari as saying on Tuesday, adding that he expected to conclude the deal in the next two months.
But this is not the first time the NNPCL would be seeking such loans. On August 16, 2023, NNPCL secured a $3.3 billion emergency crude repayment loan- a transaction aimed at supporting the naira and stabilising the foreign exchange (FX) market. The $3.3 billion crude-for-cash loan, which was arranged by the African Export-Import Bank (Afreximbank), was also targeted at supporting the federal government’s monetary and fiscal reforms. The $3.3 billion and the new $2 billion would amount to a $5.3 crude-for-cash loan.
The development comes amid concerns by Dangote Refinery over its inability to get Nigerian crude from International Oil Companies (IOCs).
