By Joke Kujenya
THE NIGERIAN National Petroleum Company (NNPC) Limited clarified that it is not currently pursuing a new $2 billion oil-for-cash loan deal, countering recent reports.
The NNPC stated that it would make an official announcement if it decided to proceed with such initiatives.
Recent reports had suggested that NNPC sought a $2 billion loan within the next two months, but the company dismissed these claims, emphasizing that it is not actively pursuing any new loan facilities at this time.
“When we are ready to proceed with any of the initiatives mentioned, we will make an official announcement,” said Olufemi Soneye, NNPC’s Chief Corporate Communications Officer.
“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 Reuters, NNPC was reportedly seeking a $2 billion loan using crude oil pre-payments as collateral.
NNPC Group Chief Executive Officer Mele Kyari had mentioned that the company wanted a loan against 30,000-35,000 barrels per day of crude production but did not specify the amount of money sought.
He stated that the cash raised would support all of NNPC’s business activities, including production growth.
Kyari clarified that the company had no issues covering gasoline payments and that this move was for regular business activities, not a desperate act.
It remains unclear which lender would arrange the loan, as three sources indicated that Afrexim would be unable to extend its exposure to Nigeria to such an extent.
Reuters also reported that NNPC owes around $6 billion to international traders for imported petrol, with payments taking longer than the standard 90 days.
The mounting debt, including overdue payments exceeding $4 billion-$5 billion for January imports alone, has led several international petrol suppliers to cease participating in recent tenders.
Kyari mentioned that any loan arrangement would involve critical and regular partners who have a history of business with NNPC.
Previously, on August 16, 2023, NNPC secured a $3.3 billion emergency crude repayment loan from the African Export-Import Bank (Afreximbank) to support the naira and stabilize the foreign exchange market.
The loan was also aimed at supporting the federal government’s monetary and fiscal reforms.
