NNPC Plans to Raise $2 Billion Loan to Support Business Activities

NNPC Plans to Raise $2 Billion to Boost Oil Production

In a bid to alleviate financial pressures, the Nigerian National Petroleum Corporation (NNPC) is planning to raise at least $2 billion, according to sources familiar with the matter. The state-backed oil company plays a crucial role in Nigeria’s economy, as its oil exports are a key source of foreign exchange reserves.

Despite being a major player in the oil industry, NNPC has faced challenges such as pipeline theft, underinvestment, and the high cost of gasoline subsidies, which have strained its cash reserves. To address these issues, NNPC chief Mele Kyari confirmed that the company is seeking a loan backed by 30,000-35,000 barrels per day of crude production.

Kyari emphasized that the funds raised would be used to support NNPC’s business activities and boost production growth. He reassured that the loan is not a desperate measure, stating, “We have no problem covering our gasoline payments. This is just money for normal business and not a desperate act.”

The loan is expected to be syndicated with regular partners who have a history of doing business with NNPC. Kyari expressed confidence in concluding the deal within the next two months. NNPC already holds a $3.3 billion oil-backed loan through Afreximbank, which has helped alleviate some of the company’s financial challenges.

With rising fuel subsidy costs exacerbating NNPC’s cash flow issues, the new loan is seen as a strategic move to manage these costs effectively. The company’s efforts to secure additional funding demonstrate its commitment to enhancing oil production and sustaining its operations in the face of economic challenges.