The Nigerian National Petroleum Corporation (NNPC) is to raise $1.56 billion capital through the forward sale structure.
This would enable the corporation to forward sale 15,000 bpd of crude oil to raise the money and to liquidate outstanding trade bills, Mr Andrew Yakubu, the Group Managing Director (GMD) of NNPC said in Abuja on Monday at an investigative hearing of the House of Representatives Joint Committee on Petroleum Resources (Upstream and Downstream).
The committee had proposed that $1.56 billion should not a loan facility.
Yakubu said the arrangement was based on a forward sale that allowed a future sale of agreed quantities of 15,000 bpd of crude oil to Special Purpose Vehicle (SPV) for a period of five years.
“Essentially, the forward sales structure will enable the corporation to settle the outstanding product import bills without violating the requirements of World Bank negative pledge," he said.
He stressed that the sales arrangement was negotiated in consultation with the federal Ministry of Finance.
The NNPC boss said that the non-reimbursement by the federal government of the petroleum products price differential to NNPC has led to accumulated and unpaid petroleum products invoices of about $3.5 billion.
He said that because of pipeline vandalism and other severe operational losses, the corporation had been unable to settle its obligations to petroleum products suppliers on time.
Yakubu said that the arrangement would guarantee future petroleum products supply to the domestic market.
Mr Elias Mbam, Chairman, Revenue Mobilization, Allocation and Fiscal Commission (RMFAC), told the committee that the commission had no details of the terms and conditions of the proposed arrangement.
He said that his presentation had been overtaken by NNPC’s submission.
According to him, the RMFAC has the constitutional responsibility to monitor accrual to and disbursement of revenue from the federation account.
Source African Press Agency
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