The Nigerian National Petroleum Company Limited (NNPCL) has revealed its intention to prepay future royalties and taxes to the Federal Government as part of the $3.3 billion financing deal it secured from the African Export-Import Bank last year. The disclosure came through a document titled ‘Frequently Asked Questions – Project Gazelle,’ released by Olufemi Soneye, the Chief Corporate Communications Officer of NNPCL, on Sunday night.
The $3.3 billion emergency crude oil repayment loan was obtained by NNPCL from the African Export-Import Bank, as reported by The PUNCH on August 17, 2023. At that time, NNPCL had indicated that the loan would be utilized to support the Federal Government in stabilizing Nigeria’s exchange rate amid economic challenges.
In the document released on Sunday night, NNPCL provided more details about the financing agreement, stating, “Everything you need to know about the NNPC Limited’s $3.3 billion loan, also known as Project Gazelle. There has been a lot of interest from the public and stakeholders in recent weeks regarding the $3.3 billion crude oil pre-payment loan, also known as Project Gazelle. This is a financing agreement secured by NNPC Limited to prepay future royalties and taxes to the Federal Government.”
The oil company clarified that it adopted a lower price benchmark for the $3.3 billion crude-for-cash loan. The move to prepay future royalties and taxes is seen as a strategic financial decision to manage the impact of the loan on the company’s cash flows and fulfill its financial obligations to the Federal Government.
As Nigeria navigates economic challenges and seeks avenues to stabilize its currency, the NNPC’s utilization of the financing deal aims to contribute to the overall economic resilience of the country. The adoption of a lower price benchmark reflects the company’s prudent financial management approach in the current economic landscape.
