On Sunday, the Nigerian National Petroleum Company Limited announced that it will pay the Federal Government’s future royalties and taxes in advance from the $3.3 billion financing agreement it obtained from African Export-Import Bank the previous year.


This was revealed by NNPCL in a paper titled “Frequently Asked Questions – Project Gazelle,” which was made public on Sunday night by Olufemi Soneye, the company’s chief corporate communications officer.

The NNPCL declared on August 17, 2023, that it had obtained a $3.3 billion emergency loan from the African Export-Import Bank to repay crude oil, according to a story by The PUNCH.

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It clarified that the oil business would use the loan to help the Federal Government stabilize the value of Nigerian Naira.

The oil corporation wrote in the document, which was released on Sunday night, “Everything you need to know about the NNPC Limited’s $3.3bn loan, also known as Project Gazelle.”

The public and stakeholders have shown a great deal of interest in the $3.3 billion crude oil prepayment loan, popularly known as Project Gazelle, in recent weeks. This is a financial arrangement whereby NNPC Limited agrees to pay the federal government in advance for future royalties and taxes.

The business added that in order to lessen the default risk and maintain financial stability, it set a lower price benchmark for the $3.3 billion crude-for-cash loan.

The facility was utilizing a conservative crude price of $65/barrel to determine the allocated crude to be produced and sold in the future, according to the firm, which provided specifics on the benchmark oil price.

The price of a barrel of crude oil, measured globally, is currently at $78.

The national oil company commented on the benchmark oil price of $65 per barrel for the $3.3 billion transaction, saying that it “provides a safety margin for price fluctuations in the future.”

For Project Gazelle, NNPC Limited has set aside up to 90,000 barrels of petroleum, guaranteeing enough cash flow for loan repayment and other commitments.

“A higher oil price will result in more revenue from the sale of the 90,000 barrels, enabling a quicker repayment schedule. But if oil prices drop, the payback period might lengthen.

The 90,000 barrels of designated crude are sized to guarantee there is sufficient cash on hand to repay the facility when it is due. In light of the anticipated future worldwide price of crude oil, this also guarantees NNPC Limited’s ability to fulfill its other cash flow obligations.

According to NNPCL, repayments were also carefully considered, linked to future oil sales, and included conservative pricing in oil sales contracts to reduce the risks brought on by fluctuations in oil prices.