The Nigerian National Petroleum Corporation (NNPC) has secured a $5 billion financial commitment with the African Export-Import Bank (Afreximbank) to kickstart investment in Nigeria’s oil and gas sector.
This follows the commencement of the implementation of the Nigerian Petroleum Industry Act.
Investors King recalls that the new Petroleum Industry Act 2021 was assented and signed into law by the President of the Federal Republic of Nigeria on August 16th, 2021 to repeal the extant Petroleum Act 2004.
The Petroleum Industry Act was enacted to provide for the legal, governance, regulatory, and fiscal framework for the Nigerian Petroleum Industry, the establishment, and development of host communities and other related matters in the upstream, midstream and downstream sectors of the petroleum industry.
The Act is categorised into 5 Chapters, 319 Sections, and 8 Schedules. The first chapter of the Act provides for the governance and institution of the petroleum industry. It lays emphasis on the fact that the ownership and control of petroleum within Nigeria and its territorial waters are vested in the Government of the Federation of Nigeria.
The Minister of Petroleum Resources who heads the Petroleum Industry has the powers as vested on him by Section 3(1) to formulate, monitor, and administer government policy in the petroleum industry, amongst other functions.
With the NNPC looking to expand its upstream portfolio, the funding will be critical for the Corporation as it steps up investments in new and strategic prospects.
The repayment of the fund is being projected to be made within a four to eight-year period with an objective to ensure major fiscal obligations and operating expenses are discharged appropriately.
Asides this, the NNPC and the Afreximbank agreed to also deepen the business collaboration between the two institutions.
The Afreximbank has a mandate to provide liquidity for trade and project related finance and related activities across the continent, in order to facilitate the quantitative and qualitative growth of trade on the continent.
The bank recently concluded a landmark 10-year, dual tranche facility of €200 million and US$166 million for the Government of Uganda.
