The Nigerian National Petroleum Corporation (NNPC) Ltd. is seeking a $2 billion oil-backed loan to finance its operations and gas projects, according to Reuters.
The loan, which is expected to be secured within the next two months, will be used to support the company’s business activities, including production growth. NNPC’s Managing Director, Mele Kyari, confirmed the plans, stating that the loan will be syndicated with regular partners.
This move comes as the Nigerian government faces challenges in financing its operations, with oil exports being a significant source of revenue. However, pipeline theft and underinvestment have impacted oil production, while the cost of gasoline subsidies has depleted cash reserves.
The agency already has a $3.3 billion oil-backed loan with Afreximbank, but the company’s lack of cash has been exacerbated by rising fuel subsidy costs. The new loan is expected to help NNPC pay off some of its debts.
Kyari said President Bola Tinubu has been working to implement reforms in the oil sector, including eliminating fuel subsidies and allowing the naira currency to trade at market levels. However, these efforts have been met with challenges, and the country’s population remains vulnerable to a cost-of-living crisis.
The move to secure additional funding is seen as a necessary step to support the company’s operations and contribute to the country’s economic growth, according to the agency.
Join our Channel...