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NNPC Seeks New Oil-Backed Loan To Finance Economy

Group Chief Executive Officer (CEO) of Nigerian National Petroleum Company (NNPC) Limited, Mele Kyari has revealed that discussion are underway for a new oil-backed loan to finance operations and allow investment in its business.

Gatekeepers News reports that Kyari on Tuesday, in a report by Reuter, said NNPC wants a loan against 30,000-35,000 barrels per day (bpd) of crude production but declined to say how much money it sought.

The CEO said cash raised would be used for all of NNPC’s business activities, including supporting production growth.

Kyari said, “We have no problem covering our gasoline payments. This is just money for normal business and not a desperate act.”

“It will be a syndication with critical but regular partners who have been in business with our company to forward the cash.”

He further expressed optimism that the deal will be concluded in the next two months.

According to the report, two sources familiar with the situation told Reuters that NNPC aims to raise at least $2 billion.

According to the report, NNPC’s debts to gasoline suppliers have doubled in the last four months to hit $6 billion.

Though NNPC has a $3.3 billion oil-backed loan through Afreximbank, five sources, according to Reuters, said the company’s lack of cash had been aggravated by rising fuel subsidy costs, adding that the new loan would be used to pay them.

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