The Federal Government has clarified that no conclusive agreement has been reached on the reported $5 billion oil-backed loan involving Nigeria and Saudi Arabia’s Aramco, amid speculation that the deal is on the verge of collapse due to falling crude oil prices.
In a statement issued Wednesday by Mohammed Manga, Director of Information and Public Relations at the Federal Ministry of Finance, the government dismissed claims suggesting the initiative has failed as “unfounded.”
“The Federal Government of Nigeria is aware of recent media reports concerning a potential forward sale of crude oil involving the Nigerian National Petroleum Company Limited (NNPC Ltd),” the statement read.
“While market speculation is not uncommon in the context of ongoing economic reforms and transactions, no final decision has been announced by the Government, and commentary suggesting the collapse of any such initiative is unfounded.”
Manga acknowledged that market reactions are often volatile during major reforms and fiscal negotiations, but stressed that the government remains committed to exploring innovative and transparent financing mechanisms.
The statement comes in response to a Reuters report that discussions around the deal have stalled due to crude price fluctuations and concerns from banks expected to co-finance the facility.
If completed, the proposed facility would be Nigeria’s largest oil-backed loan to date and mark Aramco’s most significant financial engagement with the country. However, the uncertainty created by sliding oil prices has reportedly complicated the deal structure and spooked potential financiers.
Leveraging Oil Assets Responsibly
The government reiterated its commitment to fiscally responsible strategies aimed at unlocking value from Nigeria’s vast oil reserves, enhancing external liquidity, and boosting macroeconomic stability.
“The government is focused on deploying a range of innovative, transparent, and fiscally responsible financing strategies to optimise Nigeria’s oil assets,” Manga said.
Nigeria has turned to oil-backed loans in the past to manage fiscal shortfalls and stabilise the naira. Notably, in 2023, the NNPC secured a $3 billion crude-for-cash facility from the African Export-Import Bank (Afreximbank) to provide short-term support for the foreign exchange market.
Despite the uncertainty surrounding the Aramco deal, officials say conversations remain ongoing, with all options still on the table as Nigeria navigates its path through complex global energy and financial dynamics.
