NNPC Seeks Fresh $2bn Crude-For-Cash Loan

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Nigerian National Petroleum Company Limited (NNPC) is planning to secure a fresh $2 billion oil-backed prepayment loan amid fuel scarcity in the country. According to a report by Reuters on Tuesday, NNPC plans to achieve the deal in two months.

Mele Kyari, the Group Chief Executive Officer, stated that the new financing would allow investment in its business. He said the company wanted the new loan against 30,000-35,000 barrels per day of crude production but declined to say how much money it sought.

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The cash raised would be used for all of NNPC’s business activities, including supporting production growth. “We have no problem covering our gasoline payments. This is just money for normal business and not a desperate act,” Kyari told Reuters.

The loan would be syndicated with critical but regular partners who have been in business with the company. Kyari expected to conclude the deal in the next two months.

This comes as a report emerged that NNPC’s debts to petrol suppliers had doubled in the last four months to hit $6 billion. However, NNPC spokesperson Olufemi Soneye dismissed the claim.

In August 2023, NNPC secured a $3.3 billion emergency crude repayment loan from the African Export-Import Bank (Afreximbank) aimed at supporting the naira and stabilizing the foreign exchange (FX) market.

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The existing $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.

Nigerians have continued to groan as fuel scarcity which started last week in Abuja, Nasarawa, Lagos has spread across Kano, Kaduna, Katsina and other states.

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