NNPC serviced $3bn loan with N991bn crude – Report

Ojulari

The Nigerian National Petroleum Company Limited has serviced part of its $3bn forward-sale loan from the African Export-Import Bank with crude oil worth N991bn in 2024, according to its 2024 financial statement report. The repayment was tied to Project Gazelle, a forward crude oil supply agreement signed in 2023.

On August 17, 2023, The PUNCH reported that the NNPC announced it had secured a $3.3bn emergency loan to repay crude oil obligations from Afreximbank. It explained that the loan would be used by the oil company to support the Federal Government in stabilising Nigeria’s exchange rate.

“The NNPC Ltd. and AFREXIM bank have jointly signed a commitment letter and Termsheet for an emergency $3bn crude oil repayment loan,” NNPC said in a statement.

“The signing, which took place today at the bank’s headquarters in Cairo, Egypt, will provide some immediate disbursement that will enable the NNPC Ltd. to support the Federal Government in its ongoing fiscal and monetary policy reforms aimed at stabilising the exchange rate market,” it added.

Under the deal, NNPC committed to deliver 90,000 barrels of crude oil per day from Production Sharing Contract assets to back a funding facility. According to the 2023 financial statement, a drawdown of $2.25bn had already been achieved by 31st December 2023, with principal repayment scheduled to begin in June 2024.

The funding carried an interest rate of 3-month LIBOR plus 6.5 per cent, with a 6 per cent margin and 0.5 per cent liquidity premium.

According to the 2024 financial statement, the drawdown on the facility had reached N4.9tn out of a total available N5.1tn, while N991bn worth of crude oil had been lifted in repayment, leaving an outstanding balance of N3.8tn at the end of 2024. Punch