The Nigerian National Petroleum Corporation, NNPC, has announced the initiation of strategic measures to secure a substantial oil-backed loan amounting to approximately $2 billion to facilitate its operational activities and initiatives.
As per reports by Reuters, Nigeria’s economic stability greatly hinges on the oil revenue generated by NNPC, with oil exports serving as a primary source of vital foreign exchange reserves.
Nevertheless, the adverse effects of pipeline vandalization and prolonged neglect of infrastructure have significantly impeded oil production in recent times. Additionally, the financial strain caused by gasoline subsidies has further eroded the country’s financial reserves.
In the pursuit of comprehensive reforms in Africa’s foremost oil-producing nation, President Bola Tinubu has been actively advocating for transformative changes. These reforms encompass the phasing out of fuel subsidies and aligning the naira currency towards market-driven rates, all while ensuring that the populace’s cost of living remains sustainable.
NNPC’s Chief Executive, Mele Kyari, confirmed the corporation’s intention to secure a loan leveraging 30,000-35,000 barrels of crude oil output daily. However, the specific loan amount being sought was not disclosed.
Kyari emphasized that the loan would be allocated towards bolstering all facets of NNPC’s operations, with a focus on supporting enhanced production capabilities.
He reassured, “Our financial commitments for gasoline procurement are well in hand. This loan is a strategic move to fortify our regular business activities and not a reactionary measure.”
Kyari further elaborated that the loan would be collaboratively structured with longstanding reliable partners, well-versed in NNPC’s operations, to facilitate the provision of necessary funds.
Anticipating the finalization of the agreement within the upcoming two months, the NNPC chief highlighted the corporation’s existing $3.3 billion oil-backed loan facilitated through Afreximbank.
Notably, the mounting challenges posed by escalating fuel subsidy expenses have contributed to NNPC’s financial constraints, making the new loan imperative to alleviate payment obligations.
However, despite diligent efforts to retrieve comments from NNPC Ltd., there was no response available on Tuesday regarding this matter.
