NNPC Limited announced on Wednesday that it has finalized a Commitment Letter and Term Sheet agreement with AfreximBank for an emergency $3 billion crude oil repayment loan. The signing took place at AfreximBank's headquarters in Cairo, Egypt.
In a statement provided to Vanguard newspaper, NNPC Limited clarified that the loan will offer immediate disbursement, allowing the company to support the Federal Government's ongoing fiscal and monetary policy reforms geared towards stabilizing the exchange rate market.
The development follows a recent report by the Federal Government, indicating a 13.6% reduction in daily crude oil production during July, resulting in a significant decrease in dollar revenues from crude oil exports. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) stated that production averaged 1.08 million barrels per day in July, compared to 1.25 million barrels per day recorded in June.
This decline poses a challenge to the government's targets, as it falls below the 1.69 million barrels per day production goal outlined in the 2023 budget. Furthermore, the July production volume is notably lower than the 1.7 million barrels per day production quota assigned to Nigeria by the Organization of Petroleum Exporting Countries (OPEC). The secured loan is anticipated to provide vital support in addressing these economic challenges and promoting stability.