Our Correspondent | Africa Guardian
The Nigerian National Petroleum Company Limited (NNPC) is working to secure a $2 billion loan aimed at stabilizing its finances and investing in new oil infrastructure to increase crude oil production, according to reports by Africa Intelligence.
The loan, named Project Leopard, is expected to be finalized soon, with the first $1 billion tranche already completed. NNPC Group Chief Executive Officer, Mele Kyari, and his team are now preparing the second tranche for a similar amount. Initially disclosed by Reuters in July without revealing the loan’s value, the syndicated loan will help NNPC strengthen its financial position and support the development of new oil facilities, all with the goal of raising the company’s crude oil output, Kyari explained.
“We are not struggling with gasoline payments. This funding is for normal operations, not an emergency measure. The loan will be syndicated with reliable, regular partners who have worked with us before,” Kyari stated to Reuters in July, noting that the deal should be concluded within two months.
Efforts to obtain a fresh comment from the NNPC remained unsuccessful as of Thursday night, with a spokesman not responding to a text message. However, NNPC’s Chief Corporate Communications Officer, Olufemi Soneye, previously emphasized that the company would announce any developments regarding the deal when it was ready to proceed. Soneye stated in July that while NNPC would require funding for capital-intensive projects like aggressive drilling campaigns, it would adhere to due process when announcing new financing arrangements.
Nigeria, where oil sales contribute significantly to the national revenue, has been focusing on increasing oil production to boost its finances and foreign currency reserves. The federal government set a target to raise production to 2 million barrels per day (bpd) by the end of 2024, though production in November was 1.7 million bpd.
Oando, led by Adewale Tinubu, and the Abu Dhabi National Oil Company (ADNOC) are reportedly involved in the loan financing. However, both Oando and ADNOC declined to comment when approached by Africa Intelligence. NNPC also refrained from providing details, stating it was too early to discuss an unfinished deal.
In a previous syndicated loan operation, Project Gazelle, Oando lent $500 million to the NNPC. Other participants in the $3.175 billion loan included Swiss group Gunvor International and Nigeria’s Sahara Energy Resources, with Afreximbank facilitating the operation. Although ADNOC considered joining Project Gazelle, it ultimately decided not to participate. The high interest rate of 11.58% on that loan had raised concerns, with former Vice President Atiku Abubakar criticizing it as “shady.”
In comparison, Nigeria’s recent Eurobond issue, which raised $1.5 billion on December 2, 2024, was issued at a more favorable interest rate of 10.375% over a 10-year period. The NNPC is expected to secure a more favorable rate for the new loan, with Kyari estimating that it will be backed by the sale of 30,000-35,000 barrels of crude oil daily.
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