$3bn loan serviced with N991bn crude by NNPC
According to the 2024 financial statement of the Nigerian National Petroleum Company Limited, part of its $3bn forward-sale loan from the African Export-Import Bank was serviced with crude oil worth N991bn in 2024, based on the 2023 Project Gazelle crude oil supply agreement.
Reports say that the $3bn emergency loan agreement which was secured by the NNPC in August 2023 was used to support the Federal Government in stabilising Nigeria’s exchange rate.
NNPC had said in a statement after signing the deal in 2023: “The NNPC Ltd. and AFREXIM bank have jointly signed a commitment letter and Termsheet for an emergency $3bn crude oil repayment loan.
“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,”
A 2023 financial statement revealed that a drawdown of $2.25bn had already been achieved by 31st December 2023, with NNPC delivering 90,000 barrels of crude daily.
The 2024 financial statement showed that a N991bn worth of crude had already been lifted in repayment, while the drawdown on the facility had reach N4.9tn out of the initial facility of N5.1tn, as at December 2024, with June and December 2024 being the repayment timeline.
The report read in part: “In December 2023, NNPC Limited entered into a forward sale agreement with Project Gazelle Funding Limited to supply 90,000 bbl. of crude oil per day from Production Sharing Contract Assets for the settlement of a 5-year N2.7tn funding.
“The funding was utilised by the company to finance an advance payment of future taxes and royalty obligations due to the federation on PSC assets managed by the Company on behalf of the Federation.
“As at 31st December 2024, a drawdown of N4.9tn has been achieved from the initial facility of N5.1tn.
“A total value of Crude Oil worth N991bn has been lifted with a balance of N3.8tn as at 31st December 2024.”
The arrangement reported as NNPC’s most significant forward-sale financing vehicles, however leaves NNPC Ltd laden with crude-backed loan commitments currently worth N8.07tn at present, in multiple forward-sale and project-financing arrangements.
