The Nigerian National Petroleum Company Limited (NNPCL) is grappling with massive crude-backed loan obligations estimated at N8.07 trillion, according to an analysis of its 2024 financial statements and capital-commitment disclosures.
The liabilities span multiple forward-sale and project-financing arrangements, with repayment largely tied to crude oil and gas deliveries. Over the years, these arrangements have become a core part of NNPCL’s funding structure amid fiscal pressures, declining upstream investment, and volatile crude production.
Several facilities were reportedly used to refinance older debts, fund refinery upgrades, support cash flow, and meet government revenue obligations. One of the major exposures is the Eagle Export Funding arrangement. While earlier tranches totaling $1.57 billion have been fully repaid, the remaining $900 million tranche, secured in 2023, is scheduled for repayment between June 2024 and 2028, with an outstanding balance of N1.1 trillion.
Another significant commitment involves Nigeria LNG Limited, which advanced N772 billion for incremental gas supply. By December 2024, NNPCL had drawn N535 billion, with N312 billion recovered, leaving N460 billion yet to be supplied and an accrued financing charge of N12 billion.
Refinery projects are also driving large crude-backed debt. Project Yield, funding the Port Harcourt Refinery upgrade, had an outstanding drawdown of N1.4 trillion as of December 2024, requiring deliveries of 67,000 barrels per day. Similarly, Project Leopard carries a balance of N1.3 trillion, with repayment linked to daily deliveries of 35,000 barrels.
The largest single exposure is Project Gazelle, a crude-for-cash deal used to finance advance tax and royalty payments on Production Sharing Contract assets. Out of a $5.1 billion facility, N4.9 trillion had been drawn, leaving N3.8 trillion outstanding, secured by daily deliveries of 90,000 barrels of crude.
Combined, Eagle Export Funding, Project Yield, Project Leopard, and Project Gazelle represent commitments of 213,000 barrels per day—equivalent to a sizeable share of Nigeria’s daily crude output. Analysts warn that such obligations limit operational flexibility and constrain revenue flows.
The financial strain reflects in Nigeria’s crude revenue performance. Despite a modest recovery in oil production to 1.43 million barrels per day in 2024, gross profit from crude and gas sales plunged by N824.66 billion year-on-year, falling 43.3 percent to N1.08 trillion—well below the government’s N1.46 trillion budget target.
Experts attribute the decline partly to opaque crude-for-loan deals that divert a significant portion of the country’s output before it contributes to government revenue. “Some of our crude is already tied up in loan agreements. The problem is that Nigeria doesn’t know the full details of these transactions because there’s little transparency around them,” said oil and gas expert Ademola Adigun.
Development economist Dr. Aliyu Ilias highlighted the complexity of crude swaps and oil-to-naira exchanges, urging a study to evaluate their impact on fiscal performance. Dr. Muda Yusuf of the Centre for the Promotion of Private Enterprise noted that forward-sale arrangements, many signed under the tenure of former Central Bank Governor Godwin Emefiele, continue to strain current earnings.
However, Yusuf acknowledged improvements under NNPCL’s current management led by Bayo Ojulari, citing enhanced professionalism and transparency. Analysts stress that full disclosure of crude swap and forward-sale agreements is critical to restore confidence in Nigeria’s oil revenue reporting.
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