OBINNA EZUGWU
The Nigerian National Petroleum Corporation (NNPC), says it has obtained a repayment funding of circa $1billion to support the upstream operations of its subsidiary, the Nigerian Petroleum Development Company (NPDC).
Group General Manager, Group Public Affair Division of the corporation, Kennie Obateru who disclosed this in a release, said the crude repayment has enabled it to pay NPDC’s tax obligations to the federal government, of circa $700 million with the balance utilized to fund NPDC’s capital and operating expenditures.
The repayment financing, he said, is backed by future oil production of NPDC and utilizes an established structure to enable the purchaser of the crude, Eagle Export Funding Limited (EEFL) to raise financing in the domestic and international markets, to fund an upfront payment to NNPC under Forward Sale Agreement (FSA).
The statement added that the financing which funded the repayment has been structured over two tranches: Tranche 1, and a 7-year NGN amortising tranche, Tranche 2.
Both tranches it said, will benefit from a cash sweep with the 7-year tranche having a one year non-call period.
The 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 crude, 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 corresponding calendar month and crude grade. Vitol and Matrix Energy have executed the standard NNPC Crude Oil Sale and Purchase Agreement, the release said.
The participants in the EEFL deal include Standard Chartered Bank, United Bank for Africa, Afriexim Bank, Union Bank and two oil trading companies, Vitol and Matrix Energy.
