Negotiations between Nigeria and Saudi Arabia’s Aramco for a record $5 billion oil-backed loan are stalling due to a recent drop in crude oil prices, raising concerns among banks expected to co-fund the deal, sources told Reuters.
Bola Tinubu © NANS
Negotiations between Nigeria and Saudi Arabia’s Aramco for a record $5 billion oil-backed loan are stalling due to a recent drop in crude oil prices, raising concerns among banks expected to co-fund the deal, sources told Reuters.
The loan, Nigeria’s largest of its kind and Saudi Arabia’s first major financial venture in the country, was proposed by President Bola Tinubu during a meeting with Saudi Crown Prince Mohammed bin Salman in Riyadh last November.
The decline in Brent crude prices by about 20% to $65 per barrel from $82 in January has complicated the deal, as lower prices require more oil to secure the loan.
Nigeria’s chronic under-investment in its oil sector has also hindered its ability to meet production targets, further slowing talks. The loan is part of Tinubu’s $21.5 billion foreign borrowing plan to support the budget.
Banks, including Gulf and African lenders, are wary of Nigeria’s capacity to deliver the required oil cargoes, estimated at 100,000 barrels per day.
Nigeria already allocates 300,000 bpd to repay existing oil-backed loans, and lower prices mean longer repayment periods and increased crude allocations to joint-venture partners like Shell and Oando.
Aramco and Nigeria’s NNPC declined to comment, as did the finance and petroleum ministries. Oando, expected to manage the oil offtake, also did not respond. Despite efforts to boost output and cut production costs, Nigeria’s April production was 1.5 million bpd, below the 2 million bpd budgeted at $75 per barrel, according to OPEC’s May report.
By Macdonald Dzirutwe
Saudi Arabia has launched an air accident probe following last week's cockpit stabbing on a flydubai jet, as experts examine any fallout for aviation safety alongside a separate UAE-led criminal investigation, three people close to the matter said.
Houthis attacked the international airport in the southern Yemeni town of Aden with ballistic missiles and explosive-laden drones early on Wednesday, Yemen's Transport Ministry said, as fighting intensified across several fronts between the Iran-aligned group and Saudi-backed government forces.
Saudi-backed Yemeni government forces have staged a counteroffensive to retake the coast around the Bab el-Mandeb shipping route and other strategic territory seized last month by the Iran-aligned Houthis, in a complex conflict with shifting alliances.
To make this website run properly and to improve your experience, we use cookies. For more detailed information, please check our Cookie Policy.
Necessary cookies enable core functionality. The website cannot function properly without these cookies, and can only be disabled by changing your browser preferences.