The Federal Government yesterday clarified that it has not taken a final decision on the $5bn forward sale of crude oil involving the Nigerian National Petroleum Company Limited (NNPC Ltd.) and Saudi Arabian oil giant Aramco.
The Ministry of Finance issued the clarification while rejecting claims that the deal had collapsed.
A report by Reuters on Tuesday suggested that the $5bn loan initiative had collapsed over the sharp drop in global oil prices.
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The report indicated that Nigeria and Saudi Arabian oil company Aramco "are struggling to reach an agreement" on the deal following a recent decline in crude prices which sparked concern among banks that were expected to back the deal.
According to Reuters quoting sources, the facility would be Nigeria's largest oil-backed loan to date and Saudi Arabia's first participation of this scale in the country, hinting that the decline in oil price could shrink the size of the deal.
Brent crude has fallen about 20% to around $65 per barrel from above $82 in January. According to the report, a lower oil price means Nigeria could need more barrels to back the loan, but years of under-investment are complicating its ability to meet production goals.
Daily Trust reports that there have been widespread concerns over the falling global prices which also pose threat to the 2025 budget which was benchmarked at $75 per barrel.
'Claims of collapse unfounded'
However, the Finance Ministry in a statement by Mohammed Manga, the ministry's Director of Information and Public Relations, stated that the report suggesting the initiative had failed due to concerns over falling global oil prices and issues surrounding Nigeria's oil supply capacity is unfounded.
The statement noted that while speculation about market transactions is not unusual, the claims that the forward sale has collapsed are unfounded.
The Ministry added that the government has not made any final decision on the matter, and no official announcement has been made regarding the sale.
According to the government, the media reports do not reflect the government's position even as the commentary around the collapse of the deal is inaccurate.
It reassured the public that the government remains focused on deploying a range of innovative and fiscally responsible strategies to optimize Nigeria's oil assets, strengthen macroeconomic stability, and improve external liquidity.
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The statement read, "The Federal Government of Nigeria is aware of recent media reports concerning a potential forward sale of crude oil involving the Nigerian National Petroleum Company Limited (NNPC Ltd).
"While market speculation is not uncommon in the context of ongoing economic reforms and transactions, no final decision has been announced by the Government, and commentary suggesting the collapse of any such initiative is unfounded.
"The Government remains focused on deploying a range of innovative, transparent, and fiscally responsible financing strategies to optimise Nigeria's oil assets, improve external liquidity, and strengthen macroeconomic stability."
