Nigeria and Saudi Arabian oil company Aramco are reportedly struggling to finalize a record $5 billion oil-backed loan.
A recent decline in crude prices has raised concerns among banks expected to back the deal, according to four sources.
This facility would be Nigeria’s largest oil-backed loan, and Saudi Arabia’s first such significant participation, though its size could shrink due to falling oil prices.
Nigerian President Bola Tinubu reportedly initiated discussions for the loan in November during a meeting with Saudi Crown Prince Mohammed bin Salman.
The slow progress reflects the strain from the oil price drop, largely caused by an OPEC+ policy shift.
Brent crude has fallen about 20% to around $65 per barrel from over $82 in January, meaning Nigeria might need more barrels to back the loan, but under-investment hampers production goals.
Tinubu sought approval last month for $21.5 billion in foreign borrowing, with this $5 billion facility part of that sum.
Banks involved in talks, including Gulf and at least one African lender, have expressed concerns about oil delivery, slowing discussions.
One source cited “concerns over the availability of the cargoes.”
Saudi Aramco and Nigerian ministries declined comment.