Liborous Oshoma in this episode of the Advocate, states: NNPCL BORROWING AWAY NIGERIA
Why was the NNPCL $3.3 billion forward sales of crude oil agreement with a pledge of 90,000 barrels per day not done with one of the largest commodities trading companies in the world, like Vitol, Trafigura, Mecuria, Glencore, etc?
At least those trading companies would not be charging interest rates of more than 12% from NNPCL on sale of crude and won’t charge the said 2% for forward sales either.
Also, the transaction fees of $67m that went into the private pockets of the banks that brokered the deal wouldn't have been paid if the transaction was with a commodities trader.
Why is NNPCL borrowing for the federal government of Nigeria when they are not a borrowing or lending outfit? When they simply could easily have increase their production from the miserable 1.38m barrels per day to 2.3m barrels per day. With oil prices hovering around $90 per barrel, they would increase the FX available to the federal government and there would be no need to borrow at such a high interest rate.
How much has the said $3.3b borrowing help the Naira. It was less than N1k to the dollar when NNPCL entered into that transaction. Rather, the Naira today is hovering around N1, 400+ to a dollar.
We see more of our oil being mortgaged for transactions of this nature all in the name of forward sale. That is why with a profit of N2.52 trillion in 2022 NNPCL had a liability of N2.15 trillion in the same year. N926 billion in unpaid royalty and N1.22 trillion in unpaid taxes.
NNPCL stake in Dangote refinery is valued at $2.76 billion out of which the outstanding $1.76 billion will be paid for using forward sale of 300,000 barrels per day of our crude.
Also remember that there is another loan of $1b from Lekki Refinery Funding Limited which incurred $36 million as cost of transaction and total loan will be paid to the lender in crude oil of 35,000 barrels per day. I no even talk of the 8,000 barrels of crude oil per day to secure the $300m gas assets deal from chevron ooo. Or the N114b on dem spend on repair and maintenance, N193b on transport and traveling, N267 billion on security and N496b on miscellaneous.
And Remember we only have 445,000 barrels per day committed to our daily consumption. What all these means is that soon all of our daily production will be unavailable to the FAAC as we have a backlog of cash calls to pay. Also the IOCs are allowed to take cost oil and royalty oil before sharing whatever pittance is left with the nation.
NNPCL should increase its crude oil production exponentially, instead of these unnecessary borrowing and settling middle men, as about 46% or N1.172 trillion of the profit in the audited accounts came from incomes outside crude oil. Remember, its income and performance will tremendously impact foreign exchange inflows into the country and oil revenue available to the Federation subsequently and the FX situation of Nigeria will improve overnight.
These things no be magic.
@Liborous Oshoma Esq.
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