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Crude-For-Loans: NNPCL Votes 8m Barrels Monthly For $8.8bn Debt
The Nigerian National Petroleum Company Limited has pledged 272,500 barrels per day of crude oil through a series of crude-for-loan deals totalling $8.86bn.
By pledging 272,500 barrels daily, it means that about 8.17 million barrels of crude will be used for different loan deals by the national oil firm on a monthly basis.
This is according to an analysis of a report by the Nigeria Extractive Industries Transparency Initiative and the NNPC’s financial statements.
Under these deals, notable projects include Project Panther, Project Bison, Project Eagle Export Funding (Original, Subsequent, and Subsequent 2 Debts), Project Yield, and Project Gazelle.
According to The Tide’s source, NNPC has already fully repaid $2.61bn in loans, representing 29.4 per cent of the total credit facility, while $6.25bn or 70.6 per cent, remains outstanding.
Also, out of the $8.86bn credit facility, only about $6.97bn has been received from seven crude-for-loan deals.
One of the key projects, Project Panther, involves a joint venture between NNPC and Chevron Nigeria Limited, backed by international and local banks.
The project secured a $1.4bn loan facility, with 23,500bpd pledged to service the debt. Repayment is set to commence after a moratorium, with financing terms including an SOFR (Secured Overnight Financing Rate) plus 5.5 per cent margin and a liquidity premium.
Another significant deal is Project Bison, tied to NNPC’s attempt to acquire a 20 per cent equity stake in the Dangote refinery. However, the national oil company only acquired a 7.25 per cent stake.
The project secured a $1.04bn loan from Afrexim Bank, with 35,000 bpd pledged as collateral. NNPC fully repaid this loan in June 2024.
Project Eagle Export Funding comprises three separate loans aimed at meeting various financial obligations.
The original loan, secured in 2020 for $935m, was serviced with 30,000 bpd and was fully repaid by September 2023.
A subsequent loan of $635m was also fully repaid by the same period. The third tranche, known as Project Eagle Export Funding Subsequent 2 Debt, was secured in 2023 for $900m, with 21,000 bpd pledged. Repayment is scheduled to begin in June 2024, and the loan will mature in 2028.
Project Yield, designed to support the Port Harcourt Refining Company, involves a $950m loan, with 67,000 bpd pledged for repayment.
The repayment of the loan, secured in 2022, will begin in December. This seven-year facility is crucial to refurbishing the refinery and enhancing domestic refining capacity.
However, despite this crude-for-loan arrangement, The Tide reports that fuel production at the Port Harcourt refinery has yet to commence, despite multiple postponements as of August. Promises from the Federal Ministry of Petroleum Resources and NNPC have repeatedly fallen through.
More recently, there was the Project Gazelle deal, which aimed to stabilise Nigeria’s foreign exchange market.
In December 2023, NNPC secured a $3bn forward sale agreement, pledging 90,000bpd from Production Sharing Contract assets to cover future tax and royalty obligations.
As of the end of 2023, $2.25bn had been drawn from this facility, with repayments scheduled to begin by mid-2024.
These crude-for-loan deals come at a time when Nigeria is struggling to boost its oil production.
The NEITI 2022-2023 report revealed a significant decline in crude oil output, reaching the lowest levels in a decade. In 2022, the country produced 490.94 million barrels of crude oil, a steep drop from the peak of 798.54 million barrels in 2014.
Although production slightly improved to 537.57 million barrels in 2023, this still represents only 67.16 per cent of the country’s peak production capacity.
One of the major challenges facing the sector is production deferment. In 2023, Nigeria deferred 110.66 million barrels of crude oil, down from 153.44 million barrels in 2022.
The deferment was primarily due to unscheduled maintenance, repair issues, and oil theft.
Despite government efforts to curb these issues, including initiatives to reduce theft and sabotage, operational inefficiencies persist.
NEITI reported that oil theft and sabotage resulted in the loss of 5.25 million barrels in 2023, exacerbating production struggles.
The House of Representatives Special Joint Committee recently directed NNPC to halt further crude-for-loan agreements.
This directive follows reports that the company is planning to borrow an additional $2bn in oil-backed loans amid efforts to settle a $6bn backlog owed to international oil traders, particularly following the removal of fuel subsidy.
The Tide’s source reported that the NNPC was in talks for another oil-backed loan to boost its finances and allow investment in its business, according to the Group Chief Executive Officer, NNPC, Mele Kyari.
Kyari said the company wanted the new loan against 30,000-35,000 barrels per day of crude production, though he declined to say how much money it sought.
Nigeria’s government finances rely on oil the NNPC exports, which provides the bulk of crucial foreign exchange reserves. However, pipeline theft and years of underinvestment have sapped oil production in recent years, and the cost of fuel subsidies has further depleted cash reserves.
President Bola Tinubu has been struggling to implement reforms in Africa’s biggest oil exporter – including eliminating fuel subsidies and allowing the naira currency to trade close to market levels – without putting the country’s population at a cost-of-living breaking point.
It explained at the time that the oil company would use the loan to support the Federal Government in stabilising Nigeria’s exchange rate.
The facility, among other things, would help the Federal Government attend to some of its dollar obligations, assist the Central Bank of Nigeria in stabilising the foreign exchange market, and provide funding for NNPC.
Providing details about the deal in the document titled, “Everything you need to know about the NNPC Limited’s $3.3bn loan, also known as Project Gazelle,” NNPC said, “This is a financing agreement secured by NNPC Limited to prepay future royalties and taxes to the Federal Government.”
The company also stated that it adopted a lower price benchmark for the $3.3bn crude-for-cash loan to reduce the risk of default and ensure financial stability.
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.
NNPC 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.
The Rivers State Chief judge, Justice Simeon Chibuzor Amadi has granted pardon to six inmates standing awaiting trial at the Port Harcourt maximum correctional center.
The six lucky inmates granted pardon on Tuesday by the state Chief Judge included Nwekeala Chizoba, Samuel Emmanuel, Aniete Kelvin, Ebube Fubara and Goddey Okpara who were on awaiting trial as murder suspects and have all spent between 10 years to seven years in the custody without a proper information filed against them in the court.
Justice Amadi during a special gaol delivery exercise last Tuesday at the Port Harcourt Maximum Correctional Centre opined that the special gaol delivery was part of activities lined up to commomerate the 2024/2025 legal year in the State and restated the commitment of the state judiciary in decongesting the correctional centre and ensuring that those inmates who are not supposed to be there are removed from the custody.
The state chief judge stressed the need for all stakeholders to work together to build a society that supports rehabilitation and gives a second chance to anyone or group of people who have fallen short of the expectation of the law and have been punished accordingly.
He stressed that the National Judicial Council(NJC) encourages judges to pay more attention to criminal matters to enable them to decongests the correctional facilities, noting that since his assumption into office, his administration has been able to reduce the number of inmates in Nigerian Correctional Centres and the Port Harcourt Correctional Centre in particular, to less than 2,000 as against the over 4,000 inmates previously in the faculty.
According to him, “as they release the deserving inmates, they affirm their commitment to justice, compassion and rule of law but that they must not forget the fundamental principles of justice delivery system which is truth and fairness, integrity and equality before the law.”
I encourage you all the released inmates to return to your families and become better citizens. You must not engage in action that will return you all back to prison. Let me say that while the judges show empathy to you all, it does not absolved individuals from being held accountable for actions against individuals, corporate organisations and state which the law frowns at, ”he stated
The Chief Judge thereafter stood down the exercise to enable the DPP to intervene to case files following the fact that majority of the persons listed to benefit from the exercise are facing murder charges and adjourned to a date that will come before December.
Earlier in his goodwill message, the outgoing state Comptroller of Nigerian Correctional Centre, Port Harcourt, Felix Lawrence, who was recently promoted to the rank of Assistant Controller General, commended the state judiciary led by Chief Judge, Justice Simeon Chibuzor Amadi for their continuous effort aimed at ensuring justice and decongesting the facilities.
Other activities lined up for the event included special church service at St Paul’s Cathedral , Anglican Communion, Rebisi Port Harcourt, inspection of guard of honour by the state Chief Judge mounted by officers of the Nigerian police and a special court session held at the ceremonial court hall.
By: AkujobiAmadi
The Director General of Rivers State Bureau on Public Procurement (RBoPP), Dr. Ine Briggs, has explained that the Sir Siminalayi Fubara administration plans to enforce transparency in governance through public procurement.
Speaking at a one-day Public Procurement Enlightenment workshop organised in collaboration with the State Local Government Service Commission for newly elected chairmen, vice chairmen, secretaries and leaders of legislative assemblies, Dr. Briggs said it is key for grassroot development.
She stated that the Sir. Fubara administration plans to reduce wastage and at same time infuse efficiency in public expenditure.
The RSoPP DG said the local government political office holders remain key drivers in the new vision hence the workshop is to arm them with knowledge on how to execute projects in tandem with needs of the people.
“ Your role in the prudent management of public resources is, therefore, not just administrative it’s the cornerstone of delivering the dividends of democracy. Every procurement decision you make must reflect a commitment to fairness, transparency and accountability” Dr. Briggs submitted.
One of the key goals of the administration she further reminded the participants was to use their offices to foster economic growth through public procurement.
She warned that the law establishing the agency empowers it to penalise defaulters, but that what is more important is voluntary compliance to the laws.
In addition to that, she said urged the local government council leaders that champion the practice and implementation of public procurement law.
On his part, Acting Chairman of Local Government Service Commission, Pastor GoodLife Ben Iduoku averred that the aim of the workshop is to arm key stakeholders in the local government system to generate new ideas, innovation and strategies in tandem with government policies and programmes.
The workshop dealt on various topics on procurement planning, methods, Understanding Bid Process, including types of Construction Contracts and law.
Some participants were awarded excellence and meritorious awards as part of the programme.
By: Kevin Nengia
The 19th anniversary of the National Association of Proprietors of Private Schools (NAPPS), Rivers State Chapter, recently ended in Port Harcourt in grand style, with participants from various schools including proprietors, the academia, civil society groups and top government functionaries charting the way forward for educational improvement.
The 19th NAPPS anniversary christened, ‘Innovation and Adaptation: Transforming Challenges Into Opportunities’ was held at Casoni Hotels, Port Harcourt.
In his remarks, the Chairman of the Rivers State Chapter of the association, Dr. Jaja Adafe Sunday expressed gratitude to the members and executives for their untiring efforts towards the achievements of the body.
He sought the intervention of government on the lingering crisis on the economy as it is affecting the running of schools.
He decried high cost of things including fuel and raw materials which has adversely affected the running of schools and payment of teachers.
Dr. Sunday hinted that the current economic situation in the nation is biting hard on the operations of schools, saying inflation, removal of fuel subsidy, fuel scarcity, poor electricity supply, tariffs and lack of government grants are some of the challenges faced by schools, and urged the members to brace up to the challenges, as it is the panacea to building a brighter future.
Guest speakers from the health sector and the academia thrilled the gathering on the essence of basic education which they said is the key to national development.
Former Dean of the Ignatius Ajuru University of Education, Professor Azuru and the Chief Medical Director of Meridian Hospitals, Dr. Odo Iyke were some notable guest speakers who delivered lectures at the occasion.
Some distinguished proprietors also got special recognitions and awards.
The 19th anniversary cake was cut by the Rivers State NAPPS Chairman with representatives of the state government assisting.
