THE NNPC LTD REVEALED ON ITS X PAGE ITS INTENTION TO UTILISE THE $3.3 BILLION LOAN OBTAINED FROM THE AFRICAN EXPORT-IMPORT BANK TO MEET ITS OPERATIONAL NEEDS AND PAY UPFRONT TAX AND ROYALTIES ACCRUABLE TO NIGERIA. IN ANOTHER DEVELOPMENT, THE NNPC LTD ALSO REVEALED THAT NIGERIA HAS OVER 35 BILLION BARRELS OF PROVEN RESERVES OF CRUDE THAT ARE YET TO BE EXPLOITED. IT STATED THAT AMONGST OTHER THINGS, THESE RESERVES CAN BE USED TO RAISE THE NECESSARY FUNDING BY UTILISING A FORWARD SALE FINANCING.ACCORDING TO THE NNPC, THE LOAN WILL ALSO BE USED TO STABILISE THE FOREIGN EXCHANGE MARKET BY INCREASING THE FOREIGN RESERVE. IT EXPLAINED THAT FORWARD CONTRACTS SUCH AS THIS PROVIDE A MORE IMMEDIATE SOLUTION TO THE FX LIQUIDITY NEEDS OF THE FEDERAL GOVERNMENT.  IT STATED, “THIS PROJECT PROVIDES IMMEDIATE USD FINANCING FOR NNPC LIMITED’S OPERATIONAL NEEDS, INCLUDING PAYING ITS TAX AND ROYALTY OBLIGATIONS TO NIGERIA UPFRONT BY USING THE UPFRONT FUNDING, NIGERIA CAN MAINTAIN THE STABILITY OF ITS CURRENCY, THE NAIRA, AND INCREASE ITS FOREIGN EXCHANGE RESERVES.” HOWEVER, IT EXPLAINED THAT HIGHER OIL PRICES MEAN FASTER PAYMENT FOR THE LOAN AND VICE VERSA. ALSO, THE OIL GIANT NOTED THAT IT HAD EARMARKED 90,000 BARRELS OF CRUDE OIL FOR THE PAYMENT PROCESS TO ENSURE SUFFICIENT CASH FLOW.  THE NNPC NOTED THAT FUTURE GOVERNMENT EARNINGS FROM OIL SALES WILL NOT BE SIGNIFICANTLY AFFECTED BY THE LOAN ARRANGEMENT.