The Nigerian National Petroleum Company Limited (NNPCL) is carrying crude-backed loan obligations totalling about N8.07 trillion, based on an analysis of its 2024 financial statements and capital-commitment disclosures. These forward-sale and project-financing arrangements are shaping the company’s funding mix and have implications for future government revenue and Nigeria’s oil output.

Major exposure through crude-for-loan deals: The liabilities come from several forward-sale and project-financing facilities that require NNPCL to deliver crude oil and gas over time. Notable facilities include Eagle Export Funding, Project Yield (Port Harcourt Refinery upgrade), Project Leopard, and Project Gazelle.

Earlier tranches were fully repaid by 2023. The still-outstanding portion is the Eagle Export Funding Subsequent 2 Debt (about $900 million, issued in 2023 and secured against 21,000 barrels per day).

Repayment was planned to begin in 2024, with final maturity in 2028. As of December 2024, the outstanding balance stood at about N1.1 trillion.

The forward sale agreement involves upfront payments to NEPL (NNPCL’s predecessor) in exchange for crude deliveries, with the schedule tied to delivery timelines.

Nigeria LNG (NLNG) financing:

NLNG provided upfront funding of about N772 billion for gas deliveries. By the end of 2024, N535 billion of gas had been drawn, with N312 billion recovered by NLNG; about N460 billion remained to be supplied. A financing charge of N12 billion accrued in the period, bringing the total outstanding to around N472 billion.

Refinery rehabilitation and Project Yield:

The Port Harcourt Refinery upgrade (Project Yield) has a substantial drawdown of about N1.4 trillion as of end-2024. The arrangement requires delivery of refined-product-equivalent volumes of 67,000 barrels per day; repayment starts in June 2025 after a moratorium.

This is a 7-year, N1.5 trillion loan obtained in October 2022, secured with a forward sale of refined products.

Project Leopard and Gazelle:

Project Leopard carries an outstanding balance of about N1.3 trillion, with obligations to deliver 35,000 barrels per day and repayments starting mid-2025 after a moratorium.

Project Gazelle is a large crude-for-cash arrangement used to finance advance tax and royalty payments. By December 2024, NNPCL had drawn N4.9 trillion of the total N5.1 trillion facility; crude valued at about N991 billion had been delivered, leaving an outstanding of about N3.8 trillion. The project requires sustained deliveries of 90,000 barrels per day until the liability is fully extinguished.

Combined crude-for-loan commitments (Eagle Export Funding, Project Yield, Project Leopard, and Project Gazelle) amount to about 213,000 barrels per day in forward-sale delivery obligations, in addition to NLNG gas-delivery commitments.

The volume represents a substantial portion of Nigeria’s daily crude output and underscores long-term implications for government revenue, export allocation, and operational flexibility.

Non-debt commitments such as equity stakes in refinery projects and callable capital were excluded from these debt figures.

Analysts warn that the weight of these obligations leaves NNPCL exposed to fluctuations in crude production and earnings.

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Nigeria’s gross profit from crude oil and gas sales declined in 2024, even as production showed some rebound. The government’s budget target for crude and gas profit was not met, reflecting persistent weak fiscal inflows from the petroleum sector.

Production fluctuations: Nigeria’s crude output ranged from about 1.4 to 1.6 million barrels per day in 2024, below the 1.78 million bpd target. This shortfall impacted oil revenue inflows to the Federation Account.

Revenue and transparency concerns: Some experts have criticised opacity around crude-for-cash arrangements and forward-sale deals, arguing that full details should be disclosed to restore confidence in oil revenue reporting.

World Bank notes: In 2024, despite the removal of petrol subsidies, NNPC remitted only about half of the revenue gains due to debt arrears, raising concerns about how gains are allocated and used.

NNPCL’s crude-for-loan obligations are a major feature of its funding strategy, with several large forward-sale and financing arrangements spanning oil and gas delivery commitments. While these tools can provide liquidity and funding for strategic projects, they also tie a substantial portion of Nigeria’s crude output to debt settlements and forward-sale contracts, which could constrain revenue flexibility amid production volatility and macroeconomic pressures.