Following the mounting concerns on the $3.3 billion loan secured for the Nigerian Government by the Nigerian National Petroleum Company Limited, the firm has given more detail on the debt.
OsunDailyNG reports that the Government received $2.25 billion from the $3.3 billion.
Giving further details on the facility, the Nigerian National Petroleum Company Limited, on Sunday, said it would prepay future royalties and taxes to the Federal Government from the $3.3 billion financing deal it got from the African Export-Import Bank last year.
NNPCL disclosed this in a document titled, ‘Frequently Asked Questions – Project Gazelle’, released by its Chief Corporate Communications Officer, Olufemi Soneye, on Sunday night.
Giving details on the benchmark oil price, the company said the facility used a conservative crude price of $65/barrel to calculate the allocated crude to be produced and sold.
Brent, the global benchmark for crude, is currently at about $78/barrel.
Commenting on the benchmark oil price of $65/barrel for the $3.3bn deal, the national oil firm said, “This provides a safety margin for price fluctuations in the future.
“NNPC Limited has reserved up to 90,000 barrels of crude for Project Gazelle, ensuring sufficient cash flow for repayment and other financial obligations.
“If oil prices rise, more money will come in from selling the 90,000 barrels, allowing for faster repayment. However, if oil prices fall, the repayment may be slower.
“The quantity of crude earmarked (90,000 barrels) is sized to ensure enough cash is available for the repayment of the facility when it is due. This also ensures that NNPC Limited can meet other cash flow obligations, considering the expected future price of crude oil globally.”
NNPCL also said repayments were strategically planned and tied to future oil sales, with conservative pricing in oil sales contracts mitigating the risks associated with oil price volatility.
