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Friday, September 4, 2020
According to local reports out of Nigeria, NNPC (Nigerian National Petroleum Corporation) has received funding to the tune of $1 billion for upstream operations for its subsidiary, Nigerian Petroleum Development Company (NPDC).
A statement from NNPC Thursday evening said the crude oil prepayment has enabled NNPC to pay NPDC’s tax obligations to the federal government of about $700 million with the balance to be used for NPDC’s capital and operating expenditures. The prepayment financing is backed by future oil production of NPDC
The financing, which funded the prepayment has been structured over two tranches: Five-year USD amortizing tranche and a seven-year NGN amortizing tranche. Both tranches will benefit from a cash sweep with the seven-year tranche having a one-year non-call period.
NNPC in a statement signed by its Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru, said these tranches would be repaid by Eagle Export Funding Limited from the export sale proceeds of the NPDC crude, which in turn are backed by Letters of Credit, issued by banks with a minimum credit rating, in line with market precedent.
The statement said: “These tranches shall be repaid by Eagle Export Funding Limited from the export sale proceeds of the NPDC crude, which in turn are backed by Letters of Credit, issued by banks with a minimum credit rating, in line with market precedent.
“The export price for the crude is the relevant NNPC Official Selling Price (OSP) for the corresponding calendar month and crude grade. Vitol and Matrix Energy have executed the standard NNPC Crude Oil Sale & Purchase Agreement.”
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