The inability of the Nigerian National Petroleum Corporation (NNPC) to liquidate an over $1.5 billion debt owed local and international oil traders involved in the importation of petroleum products on behalf of the corporation has raised concern over the long-term sustainability of supply of products in the country, This Day reports.
This Day gathered that the NNPC owes trading companies over $1.5 billion dating back to 2010, further confirming concerns that have been raised over the long-term effectiveness of the corporation and its ability to meet its obligations.
The debt owed both local and foreign companies had initially risen to $3 billion. However, the corporation was compelled to seek a $1.5 billion loan in January 2013 from foreign and local lenders to offset its indebtedness to international oil suppliers following threats of lawsuits.
The foreign traders – Trafigura, Vitol, Glencore and Acardia, among others – were under intense pressure from their bankers such as BNP Paribas, Standard Chartered, Citi Bank and Napaxis, which financed the imports to repay the loan facilities granted them.
It is not clear if the $1.5 billion loan was eventually secured, but industry sources maintain that over $1.5 billion is still owed by NNPC to local and foreign traders.
In a swift response however, a top official of the NNPC, who craved anonymity stated that the corporation was doing everything possible to fulfill its obligation to suppliers in accordance with laid down procedures and terms of agreements.