The Nigerian National Petroleum Company Limited (NNPCL) has said that it plans to use the $3.3 billion loan from African Export-Import Bank for operational needs and meet tax and royalties obligations. NNPCL said this in a “Frequently Asked Questions – Project Gazelle, released by Olufemi Soneye, the NNPCL Chief Corporate Communications Officer. He said that part of the loan would be used to stabilise the foreign exchange market by increasing the foreign reserve. NNPCL said this would provide immediate solution to the liquidity problems in the foreign exchange market.
“This project provides immediate USD financing for NNPC Limited’s operational needs, including paying its tax and royalty obligations to Nigeria upfront. By using the upfront funding, Nigeria can maintain the stability of its currency, the Naira, and increase its foreign exchange reserves.” The NNPCL said it had adopted $65 per barrel as the benchmark oil price of for repaying the loan. It added that it used that figure to insulate the repayment plan from the vagaries of oil price in the international oil market. “Project Gazelle uses a conservative crude price of $65 per barrel to calculate the allocated crude to be produced and sold in the future. This provides a safety margin for price fluctuations in future.”