7 January 2013

Nigeria: NNPC Borrows U.S.$1.5 Billion to Pay Fuel Debt

Photo: Africa Undisguised
Oil rig in Nigeria

The Nigerian National Petroleum Corporation (NNPC) has obtained a $1.5 billion equivalent to about N240 billion syndicated loan to help it pay debts to international fuel traders, a senior banking source with knowledge of the deal said yesterday.

The deal struck at the end of last year is seen as crucial to easing the burden on big commodity

traders, who were facing the prospect of painful multi-million dollar write-offs, oil trading sources told Reuters.

The loan, provided by several Nigerian and international banks and brokered by Standard

Chartered, will be paid back over five and half years. The NNPC has put up 15,000 barrels per day of its oil production as collateral, the source told Reuters.

It would be recalled that both chambers of the National Assembly had at the end of the year grudgingly approved the sum of N161 billion supplementary budget requested by President Goodluck Jonathan to pay off outstanding fuel subsidy debt.

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