NNPC Receives $1 B Funding for Upstream Operations

NNPC Receives $1 B Funding for Upstream Operations

The Nigerian National Petroleum Corporation (NNPC) has received a prepayment funding of around $1 billion to support the upstream operations of its subsidiary company, the Nigerian Petroleum Development Company (NPDC), according to This Day.

Crude oil prepayment has enabled the NNPC to pay the NPDC’s tax obligations to the federal government, equating to about $700 million. This will be utilized to fund NPDC’s capital expenditures (Capex) and operating expenditures (Opex).

The prepayment financing will be produced by future oil production of the NPDC. This means structuring the finances in such a way that the purchaser of the crude, Eagle Export Funding Limited, will be enabled to raise financing in the domestic and international markets, to fund an upfront payment to NNPC under a Forward Sale Agreement (FSA).

There are two financing methods: a five-year USD amortizing tranche (Tranche 1) and a seven-year NGN amortizing tranche (Tranche 2).



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