Nigeria's $5bn oil-backed loan from Aramco 'delayed by oil price drop'
Nigeria and Saudi Arabian oil company Aramco are struggling to reach an agreement on a record $5bn (R88.63bn) oil-backed loan after a recent decline in crude prices sparked concern among banks that were expected to back the deal, four sources told Reuters.
The facility would be Nigeria's largest oil-backed loan to date and Saudi Arabia's first participation of this scale in the country, although the decline in oil price could shrink the size of the deal, the sources said.
Nigeria's President Bola Tinubu, two of the sources said, first broached the loan in November when he met with Saudi Crown Prince Mohammed bin Salman in Riyadh at the Saudi-African Summit. Details and progress on the loan talks have not been previously reported.
The slow progress in discussions reflects the strain of the recent oil price drop, caused largely by a shift in OPEC+ policy to regain market share rather than curtail supply.
Brent has fallen about 20% to around $65 per barrel from above $82 in January. A lower oil price means Nigeria could need more barrels to back the loan, but years of under-investment are complicating its ability to meet production goals.
Tinubu sought approval for $21.5bn (R381.10bn) in foreign borrowing last month to bolster the budget, and the $5bn oil-backed facility under discussion with Aramco would be part of that, sources said.
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