Mr. Mele Kolo Kyari, GMD, NNPC.

By Adebayo Obajemu

The Nigerian National Petroleum Corporation (NNPC) is set to utilise a large portion of the $1.5 billion oil prepayment deal with Vitol and Matrix Energy to pay taxes owed by its subsidiary, Nigerian Petroleum Development Company Ltd  (NPDC).

The remainder is expected to go towards operational expenses and capital expenditure, and could also fund an upgrade of the Port Harcourt refinery.

A report from Reuters, which stated that Nigeria signed a $1.5 billion oil prepayment deal with Vitol Group and Matrix Energy. The deal, which is a first of its kind since the pandemic, was led by Standard Chartered Bank.

This newspaper learned that the deal was also backed by the African Export-Import Bank and United Bank for Africa. It guarantees that both Matrix and Vitol will receive 15,000 barrels of crude per day for five years starting from next month.

The deal is expected to give Nigeria the cash it needs to take care of its budget issues. The country, which was already cash-strapped prior to the pandemic, suffered huge blows after global oil prices drastically declined earlier.