April 15, 2024

Afreximbank commits $1.04bn to crude oil exploration in Nigeria


Solomon Ezeme


In a press statement released by Afreximbank on Wednesday,

The Pan-African multilateral financial institution, Afreximbank on Wednesday said it has signed a $1.04 billion facility with the Nigerian National Petroleum Corporation (NNPC), to finance oil exploration activities in the country.

A statement issued by the bank said an agreement was signed by both parties during the second Intra-Africa Trade Fair in Durban.

Executive Vice President, Business Development & Corporate Banking, Afreximbank, Mr. Amr Kamel, signed on behalf of the bank while Executive Director and Group Chief Executive Officer, Umor Ajia, NNPC signed for the national oil company.

The statement explain that the agreement which is aimed at promoting local content in the Africa oil & gas and related industries, will see the NNPC deliver 35,000 barrels of crude oil per day on FSA basis.

“The transaction comprises a Pre-Export/Shipment Finance Facility underpinned by a Forward Sale Agreement (FSA) and Offtake Contracts from the Nigerian National Petroleum Corporation acting as the Borrower and Seller.

“NNPC will enter an FSA within which it shall deliver 35,000 barrels of crude oil per day.

“The proceeds of the facility will boost tax revenues and foreign currency receipts and create thousands of jobs in the oil and gas refining value chain, all by more than US$2.4bn to the immediate benefit of the government thereby improving the balance of trade and Gross Domestic Product in Nigeria – Africa’s largest economy.

“The transaction complies with Afreximank’s mandate to promote local content in Africa’s Oil and Gas and other mining industry and generate foreign receivables into Africa,” the statement read.

Prof. Benedict Oramah, President and Board Chairman of the bank who commended the move, described the attempt by foreign nations to make Africa abandon its immediate need of tackling energy poverty and focus on the global decarbonisation agenda, as foolish.

He said this has informed the bank’s decision to extend the facility to the Nigerian Government.

“Stopping development for parts of Africa today to achieve a clean environment for the whole world tomorrow is utterly foolhardy,” he noted.

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