The African Export-Import Bank has indicated interest in assisting Nigeria’s state-owned energy company, Nigerian National Petroleum Corporation Limited, to raise $5 billion for plans to buy and manage oil and gas assets.

Bloomberg reports that the Cairo-based lender agreed to take on a “financial advisory and fundraising mandated lead arranger role” with Nigerian National Petroleum Co., according to a summary of a meeting between Afreximbank President, Benedict Oramah, and NNPC Group Managing Director, Mele Kyari, during the week. Under a legislation passed in August, NNPC has been re-incorporated as a commercially oriented limited liability company.

The report said raising $5 billion would enable the new firm to acquire and operate oil and gas assets in Nigeria. Afreximbank intends to underwrite $1 billion of the planned borrowing, it said. International oil majors including Shell Plc are trying to find buyers for their remaining onshore and shallow water licenses in Africa’s largest crude producer so that they can focus on deep-water projects. Meanwhile, analysts at FBNQuest Research have pointed out that substantial subsidy cost and oil production challenges will prevent Nigeria from fully reaping the benefits of rising oil prices.

The analysts stated this in a note issued a few days after the Federal Government backpedalled on its earlier plan to scrap fuel subsidy in the second half of this year. Citing the latest monthly distribution by the Federation Account Allocation Committee (FAAC) to the three tiers of government, the analysts pointed out that while the N700billion distributed in January represents a 3.5per cent (N24billion) increase over the previous month’s payout, “the increase recorded is due to a rise in takes from companies’ income tax and Value Added Tax (VAT),” (and) that “collections from petroleum profit tax (PPT) and oil and gas royalties decreased significantly.”

“The Nigerian National Petroleum Corporation (NNPC) disclosed in its FAAC report for last month that a total of N271 billionn in value shortfall (fuel subsidy claims) was to be deducted from January’s FAAC remittance. On Monday, the FGN announced the suspension of petrol subsidy removal ‘till further notice,” the analysts further stated:

(New Telegraph)

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