Suspend crude-for-loan deal, Reps tell NNPCL
The House of Representatives Special Joint Committee investigating factors working against the petroleum sector has directed the Nigerian National Petroleum Company Limited to halt what it called the mortgage of Nigeria’s future crude oil until it concludes its assignment.
Recall that the committee chaired by the lawmaker representing Ideato South/Ideato North Federal Constituency, Imo State, Ikenga Ugochinyere, commenced its probe of shady deals in the sector last week.
The committee’s directive followed reports that NNPCL is planning to borrow an additional $2bn in crude oil-backed loans from international creditors to boost its financial inflow.
The Group Chief Executive Officer of the NNPC, Mele Kyari, according to the panel, reportedly stated that the national oil company is in discussions with international creditors to raise an oil-backed credit facility.
This was a sequel to recent findings that the national oil company is struggling to pay international oil traders a backlog of $6bn amid subsidy removal.
In a statement issued by Ugochinyere on Wednesday, the company urged the NNPCL not to undermine the forensic investigation by the House of Representatives with another fresh loan.
It warned that the move if allowed, will further worsen the situation of of things, starve the refineries of feedstock, weaken revenue generation and create room for waste of future revenue.
The statement reads, “The citizens were excited on the recent news of President Tinubu’s intervention for crude supply to local refineries in naira and the committee has received intel of plans to mortgage future crude revenue and oil for another loan at a time the nation is struggling.
“This is preemptive of the committee’s work and we want to want to announce the halt of this fresh move and for the state oil company to brief the parliament. The revenue being mortgaged are sovereign wealth of the people and the parliament has a duty as the watchdog of the commonwealth to step in. The NNPCL today is owned by FG and Nigerians, hence, its actions must not hurt their shareholders who we lawmakers represent.
“We gathered you here today on a shocking development and alleged move by the leadership of the Nigerian National Petroleum Company Limited to mortgage once again our future crude oil assets and revenues for alleged mere administrative purposes.
“As the Chairmen of the joint investigative Committees on Petroleum Resources Midstream and Downstream, it’s our duty to act in the best interest of the citizens and ensure that the downstream and midstream sectors are protected.”
He noted that the Committee in its ongoing investigation is probing allegations of non-remittance to federation accounts and non-availability of crude to domestic refineries.
The panel warned the oil company not to work against the recent directive of the Federal Government on the need to protect local refineries.
The statement further read, “We are calling on NNPCL to halt further plans to borrow more loan with crude oil, as the move will sabotage the President’s deal for domestic crude supply.
“In August 2023, following the removal of fuel subsidy and the unification of the forex market which significantly weakened the naira, the Federal Government through the NNPCL secured a $3.3 billion loan from Afrexim bank to shore up liquidity in the market.
“Mele Kyari had explained then that the loan would shore up the foreign exchange reserve and provide a more urgent solution to the country’s FX challenges.
“The loan is said to be paid with crude oil set at $65 per barrel and had earmarked around 90,000 barrels for the process. We are urging the NNPCL not to undermine the forensic investigation by the House of Representatives into crude oil supply with another fresh loan, as the move is a threat to local refinery.”
