NNPC intends to obtain another $2 billion crude oil-backed loan to boost the economy

The Nigerian National Petroleum Corporation (NNPC) is planning to borrow an additional $2 billion in crude oil-backed loans from international creditors to boost its financial inflow.
In addition, Mele Kyari, the Group Chief Executive Officer (GCEO) of the NNPC, informed Reuters that the national oil company is in discussions with international creditors to raise an oil-backed credit facility.
This follows the recent revelation that the national oil company is struggling to pay international oil traders a backlog of $6 billion amid subsidy removal.
Kyari said the credit facility will help to boost its finances and allow investment in the oil and gas sector.
However, the GCEO did not disclose the international financial body with which NNPC is in talks, nor the amount it is planning to raise from the transaction.
He did mention that the cash raised would be used for all of NNPC’s business activities, including supporting production growth.
Nigeria’s oil and gas sector, the primary revenue source for the federal government, faces significant underinvestment.
Many major oil companies are reluctant to explore the country’s shores due to oil theft and a hostile economic climate.
In May, the CEO of TotalEnergies, Patrick Pouyanne, revealed that his company had to redirect a $6 billion deal to Angola instead of Nigeria due to these issues.
Furthermore, the federal government, particularly the upstream sector, has struggled to increase crude oil production to an estimated 2 million barrels per day.
This shortfall hinders the country’s ability to leverage international oil prices and secure sufficient foreign exchange earnings.

Source: nairametrics.com

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