Close Menu
    Facebook X (Twitter) Instagram
    Facebook X (Twitter) Instagram
    SweetCrudeReportsSweetCrudeReports
    Subscribe
    • Home
    • Oil
    • Gas
    • Power
    • Solid Minerals
    • Labour
    • Financing
    • Freight
    • Community Development
    • E-Editions
    SweetCrudeReportsSweetCrudeReports
    Home » NNPC Ltd clarifies $3 billion AfreximBank loan

    NNPC Ltd clarifies $3 billion AfreximBank loan

    August 20, 2023
    Share
    Facebook Twitter LinkedIn WhatsApp
    *A general view of the newly rebranded NNPC Mega Gas Station in Abuja, Nigeria August 30, 2022. REUTERS/Afolabi Sotunde

    Lagos – The management of the Nigerian National Petroleum Company Limited, NNPCL, has proffered clarifications on the rationale behind obtaining a $3 billion loan facility from the Cairo based AfreximBank.

    What is the $3bn loan about?

    The NNPC Ltd secured an emergency $3bn crude oil repayment loan from Afreximbank. This is not a crude-for-refined product swap but an upfront cash loan against proceeds from a limited amount of future crude oil production.

    Is this loan risky for NNPC ltd or the Nigerian treasury?

    No. The exposure for NNPC Ltd is very limited, covering just a fraction of their entitlements. Additionally, there are no sovereign guarantees tied to this loan.

    What’s the benefit of this loan to Nigeria?

    The loan will assist NNPC Ltd in settling taxes and royalties in advance. It will also equip the Federal Government with the necessary dollar liquidity to stabilize the Naira, with limited risk.

    How will the loan be disbursed?

    The funds will be released in stages or tranches based on the specific needs and requirements of the federal government.

    Will this loan affect fuel prices?

    As strengthened Naira as a result of this initiative will lead to a reduction in fuel costs. This means that if the Naira appreciates in value, the cost of fuel will drop, and further increases will be halted.

    What about subsidies? Are they coming back?

    No. a stronger Naira will result in lower prices from the current level, making subsidies unnecessary. The deregulation policy remains unchanged.

    How will the loan be repaid?

    The loan will be repaid against a fraction of proceeds from future crude oil production. It’s a strategic move that ensures a balance between our current economic needs and future production capabilities.

    What is the difference between this and previous swap deals?

    This is not a crude oil for refined products agreement where the government does not earn any proceeds from the swap.

    Is this ‘Ways and Means 2.0’?

    Absolutely not. NNPC Ltd is not in the business of printing money and is not a Central Bank. NNPC Ltd is borrowing from third party institutions to repay its taxes and royalties to the treasury (which it would have normally paid) in advance.

    The NNPC Limited also urged those who seek further clarification and update on the on its $3bn Emergency Crude Repayment Loan from Afreximbank, to check the official social media channels of the NNPC Ltd and the government of Nigeria.

    Related News

    NDPHC launches 7.5MVA substation in Borno to boost power supply

    Oando secures $375m Afreximbank loan to boost oil and gas expansion plan

    Nigeria loses N710bn to gas flaring in four months

    E-book
    Resilience Exhibition

    Latest News

    NDPHC launches 7.5MVA substation in Borno to boost power supply

    June 9, 2025

    Nigeria sends mining scholars to Australia for training

    June 9, 2025

    Shipping firms dodges $900m cost, as Nigeria hit by empty container glut

    June 9, 2025

    Military busts 27 illegal refineries in Rivers, Bayelsa, others

    June 9, 2025

    ‘OPEC oil output rises in May but compensation cuts limit hike’

    June 9, 2025
    Demo
    Facebook X (Twitter) Instagram
    • Opec Daily Basket
    • Oil
    • Power
    • Gas
    • Freight
    • Financing
    • Labour
    • Technology
    • Solid Mineral
    • Conferences/Seminars
    • Community Development
    • Nigerian Content Initiative
    • Niger-Delta Question
    • Insurance
    • Other News
    • Focus
    • Feedback
    • Hanging Out With Markson

    Subscribe for Updates

    Get the latest energy news from Sweetcrudereports.

    Please wait...
    Please enter all required fields Click to hide
    Correct invalid entries Click to hide
    © 2025 Sweetcrudereports.
    • About Us
    • Advertise with us
    • Privacy Policy

    Type above and press Enter to search. Press Esc to cancel.