- NNPC's effort to solve Nigeria's oil production challenges received a major boost after it secured a $5 billion investment commitment from African Export-Import Bank
- The money will be used to fund major investments in Nigeria’s upstream sector and also help improve Nigeria's production capacity
- African Export-Import Bank billion dollars investment is the first after the Petroleum Industry Act signed by President Muhammdu Buhari in August 2021
The African Export-Import Bank (Afreximbank) has committed $5 billion to the Nigerian National Petroleum Company (NNPC) Limited to support large developments in the country's upstream oil sector.
The upstream sector search for deposits of oil or gas (exploration) and then its extraction through drilling or other methods.
The financing was obtained by NNPC following a meeting on Wednesday in Cairo, Egypt, between Benedict Oramah, chairman of the board of directors and president of the African Export-Import Bank (Afreximbank), and the NNPC team led by Mele Kyari, group managing director.
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NNPC and the bank also committed to working together to raise $5 billion to acquire, invest in, and run energy-producing assets in Nigeria.
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The meeting also saw Afreximbank commit to underwriting $1 billion as part of the forward sales base trade finance transaction.
The expected impact of the deal
President Muhammadu Buhari signed the Petroleum Industry Bill into law on August 16, 2021.
Following the assent, the Federal government approached the corporate affairs commission (CAC) to incorporate NNPC as a public limited company.
The new legislation expands the NNPC's commercial opportunities, allowing it to earn more money and attract foreign direct investment into the Nigerian energy sector.
TheCable notes that the funding marks a major achievement in NNPC's quest to scale up investments in the oil and gas industry following the commencement of the implementation of the Petroleum Industry Act.
The funding will also help Nigeria improve its oil production level.
Nigeria accidentally discover oil in northeast region
Meanwhile, Legit.ng had earlier reported that minister of state petroleum, Chief Timipre Sylva, said the country accidentally discovered 1 billion barrel of crude oil in the Northeast.
According to him, a lot of oil is yet to be found in Nigeria and there was a need for more exploration in the country as more oil would be discovered.
He also noted that when the Port Harcourt refinery is completed, President Muhammadu Buhari government would have achieved a lot.