Nigerian Oil Firm Takes U.S.$1.5 Billion Loan To Pay Off Debts

The Nigerian National Petroleum Corporation (NNPC) has obtained a $1.5 billion syndicated loan to help it pay debts to international fuel traders, Reuters reported Monday, quoting a senior banking source with knowledge of the deal.

The deal struck at the end of last year is seen as crucial to easing the burden on big commodity traders, who were facing the prospect of painful multimillion dollar write-offs.

The loan, provided by several Nigerian and international banks and brokered by Standard Chartered Bank Plc, will be paid back over five-and-a-half years, the news agency reported, adding that the corporation has put up 15,000 barrels per day of its oil production as collateral.

A report last year by Bloomberg stated that the state oil company and ExxonMobil Corporation, the world's largest energy company by market value, were seeking a $1.5 billion loan for a joint venture to develop offshore oil fields in Nigeria.

Standard Chartered and South African lenders, Standard Bank Group Ltd and Nedbank Group Ltd, were among the banks reported to be involved in the deal.

It could not be ascertained whether the said loan was the same $1.5 billion five-year amortising restructuring syndicated loan the NNPC was reported to have been seeking in the last quarter of 2011, to secure from international lenders.

It had been indicated then that the deal would mark NNPC's first foreign syndicated loan.

BNP Paribas, Standard Bank and Standard Chartered had been identified as arranging that loan.

The inability of the Federal Government to pay the corporation its $8.1 billion subsidy claims is said to be straining its ability to import petroleum products and has added to its financial burden after private companies stopped importing earlier last year.

The corporation, which used to account for about 50 per cent of Nigeria's imports, is importing virtually all domestic petrol requirements, as private companies have shunned imports owing to delays in payment of their subsidy claims by the government.

 

via This Day (Lagos)

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