There are indications that the Nigerian National Petroleum Company Limited (NNPCL) will borrow another $2 billion loan to bring the nation’s crude-backed loan to $5.3 billion.
This is coming amid the country’s wobbling oil production, record low investment into the oil sector and alleged $6 billion debt to oil traders by the NNPCL.
While domestic crude oil refiners are raising concerns over lack of feedstock as some of them are relying on import, the crude by loan according to reports by Reuters would be coming from international creditors to enhance NNPC financial inflow.
Earlier NNPCL had taken the African Export-Import Bank (Afreximbank) syndicated $3.3 billion crude oil loan where the state oil company would pay back 90,000 barrels of crude per day, totaling 164.25 million barrels of crude oil. The worth of the crude is about $14.6 billion going by the price of Nigeria’s Brass River and Qua Iboe grade of crude, which hovered around $89.49 per barrel.
While Nigeria’s crude oil was about two million barrels per day in 2013, the nation’s oil output has steadily declined to a meagre 1.2 million bpd of which NNPCL alone takes.
The 2024 budget had projected a daily oil production of 1.78 million barrels but Nigeria recorded a cumulative shortfall of 88.2 million barrels in the first half of the year. This shortfall alone stands at $7.2 billion, a figure which is about $2 billion higher than the total crude back loan, if the country had improved its production.
Group Chief Executive Officer of NNPCL, Mele Kyari, informed Reuters that the national oil company is in discussions with international creditors to raise an oil-backed credit facility. However, Kyari did not disclose the specific international financial body involved in the talks, nor the exact amount planned to be raised.
“We have no problem covering our gasoline payments. This is just money for normal business and not a desperate act,” he stated. “It will be syndication with critical but regular partners who have been in business with our company to forward the cash.”
The post NNPCL to borrow another $2 billion crude-backed loan appeared first on Guardian Nigeria News.
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