Nigeria targets Abu Dhabi for oil-backed loan

• Country reliant on oil
• $2bn funding target
• Invest in oil installations

Nigeria’s state-owned oil company, the Nigerian National Petroleum Company (NNPC), is looking to Abu Dhabi National Oil Company (Adnoc) as a potential source of financing as the African state strives to increase its crude oil production capacity.

NNPC seeks to raise $2 billion through a syndicated crude oil-backed loan in an operation called Project Leopard.

The first $1 billion has already been concluded, according to a report by the Paris-based Africa Intelligence platform.

Nigeria, which is an Opec member, and Africa’s largest oil exporter, produces on average 1.4 million barrels per day (bpd) and is targeting an output of 2.6 million bpd by 2026, including condensates.

The country relies heavily on oil, which provides the bulk of foreign exchange reserves, but faces declining production mainly due to underinvestment in the sector, crude theft and pipeline vandalism.

• UAE believes trade with Africa is worth the risk
• Nigeria-UAE trade tipped to recover as Emirates restarts flights
• Saudi Arabia plans to invest in Nigeria’s oil refineries

The new loan will allow NNPC to balance its finances and invest in new oil installations.

NNPC, which already has a $3.3 billion oil-backed loan through a pan-African bank, Afreximbank, is also considering using Oando group and other oil companies for the financing facility.

Oando, alongside Swiss group Gunvor International and Nigeria’s Sahara Energy Resources, was part of a consortium of crude oil off-taker lending institutions for a loan arranged by Afreximbank. Adnoc considered participating in the operation but eventually declined.

In July Reuters reported that NNPC’s debts to gasoline suppliers had doubled in the last four months to hit $6 billion.