The Nigerian National Petroleum Company Limited (NNPCL) has revealed plans to prepay future royalties and taxes to the Federal Government from the $3.3 billion financing deal it secured from the African Export-Import Bank last year.
The disclosure was made in a document titled ‘Frequently Asked Questions – Project Gazelle,’ released by NNPCL’s Chief Corporate Communications Officer, Olufemi Soneye, on Sunday night.
The $3.3 billion emergency crude oil repayment loan, secured on August 17, 2023, is intended to support the Federal Government in stabilizing Nigeria’s exchange rate.
According to NNPCL, the facility adopts a conservative crude price benchmark of $65 per barrel for calculating the allocated crude to be produced and sold in the future. This precautionary measure aims to reduce the risk of default and ensure financial stability, providing a safety margin for potential price fluctuations.
Repayments under the financing deal are strategically planned and tied to future oil sales, with the use of conservative pricing in oil sales contracts to mitigate risks associated with oil price volatility.