State-owned Nigerian National Petroleum Corporation (NNPC) has secured a $1 billion facility from the African Export-Import Bank (Afreximbank) to underpin its exploration efforts.

Under a separate deal, the Cairo-based bank has also agreed a $750 million loan to Nigerian independent Eroton E&P.

Afreximbank president Benedict Oramah explained that the bank’s decision on the NNPC agreement, in the context of the world’s climate change agenda, is a case of adopting a balanced approach.

"Utterly foolhardy"

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

"Mistakes of others"

Oramah said Africa is more a victim of global warming than a perpetrator, contributing only 4% of greenhouse gas emissions, while a majority of the continent still depends on fossil fuels for survival and “should not bear the brunt of punishment for the mistakes of others”.

The NNPC agreement was concluded yesterday in Durban during the second Intra-Africa trade fair in South Africa, and was swiftly followed by the Eroton deal.

Eroton operates OML 18 in the Eastern Niger Delta and the funds will be used, among other things, as a reserve-based lending facility and also to finance all the companies loans with its existing lender.

Other parties in the deal are Shell Western Supply & Trading and Midwestern Oil & Gas Company.

Afreximbank said the NNPC arrangement — the exact value of which is $1.04 billion — comprises a pre-export/shipment finance facility underpinned by a forward sale agreement and offtake contracts from NNPC, which acts as the borrower and seller.

NNPC will back the agreement by oil cargoes of 35,000 barrels per day of oil.

The proceeds of the facility aim to boost tax revenues and foreign currency receipts and create thousands of jobs in the oil and gas refining value chain.

No further details were revealed by the bank, while NNPC had not issued a statement

NNPC group chief executive Umor Ajia signed the facility agreement, along with Amr Kamel, head of business development at Afreximbank.

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