NNPCL’s crude-backed loan burdens reach N8.07tn as major oil-for-cash deals stretch repayment capacity and constrain revenue flows
The Nigerian National Petroleum Company Limited is carrying crude-backed loan burdens estimated at N8.07tn, according to an analysis of its 2024 financial statements, with multiple forward-sale and project-financing deals now central to its funding structure.
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The obligations span crude and gas-delivery commitments built up during years of falling investment, volatile production and mounting fiscal pressure.
Several of the loans refinanced older debts, supported cash flow, funded refinery rehabilitation and shored up government revenues.
One of the largest exposures stems from the Eagle Export Funding arrangement.
While the 2024 accounts specify deliveries of at least 1.8 million barrels per cycle, earlier reporting shows the facility comprises three tranches.
Two earlier loans of $935m and $635m were repaid by September 2023, leaving the $900m Subsequent 2 facility secured in 2023.
As of December 2024, its outstanding balance stood at N1.1tn, with repayments scheduled from June 2024 until 2028.
A further N772bn was advanced under the Nigeria LNG Limited incremental gas-supply financing scheme.
By year-end 2024, gas valued at N535bn had been delivered and N312bn recovered, leaving N460bn outstanding alongside an N12bn financing charge.
The Port Harcourt Refinery rehabilitation also carries a sizeable obligation.
Project Yield, the crude-secured structure supporting the upgrade, had N1.4tn drawn by December 2024.
It requires refined-product-equivalent deliveries of 67,000 barrels per day, with repayments due to begin in June 2025 after a two-and-a-half-year moratorium.
Similarly, Project Leopard, a five-year forward-sale agreement backed by 35,000 barrels per day, recorded an outstanding N1.3tn. Repayments are set to commence mid-2025 following a six-month moratorium.
The largest commitment is Project Gazelle, a crude-for-cash deal used to finance tax and royalty payments on Production Sharing Contract assets.
By the end of 2024, NNPCL had drawn N4.9tn out of N5.1tn, delivered N991bn worth of crude and retained an outstanding obligation of N3.8tn.
The agreement mandates deliveries of 90,000 barrels per day until repayment is complete.
Combined, major forward-sale deals under Eagle Export Funding, Project Yield, Project Leopard and Project Gazelle require 213,000 barrels per day, on top of gas-delivery obligations to NLNG.
Industry analysts warn that these commitments tie up a sizeable proportion of Nigeria’s crude output and limit operational flexibility.
The financial disclosures come amid a sharp fall in national crude-and-gas gross profit, which plunged by N824.66bn in 2024 to N1.08tn, a 43.32 per cent drop from the previous year and far below budget expectations.
Despite a modest production uptick to 1.43 million barrels per day, output still lagged the 1.78 million barrels per day benchmark, contributing to weak fiscal inflows.
Production improved marginally due to reduced vandalism and additional volumes from marginal-field operators, yet persistent infrastructure constraints and crude theft kept output below target.
Scrutiny of NNPCL’s remittances also intensified after the World Bank reported that only half of subsidy-removal gains had been transferred to the Federation in 2024, with N500bn withheld to settle arrears.
Experts attribute Nigeria’s shrinking oil earnings to opaque crude-for-cash deals, limited public disclosure and legacy forward-sale agreements.
Economist Ademola Adigun said many barrels were already committed to loan repayment, reducing inflows to the Federation Account.
Others, including Dr Aliyu Ilias and Dr Muda Yusuf, highlighted complex swap structures, historical emergency financing arrangements and lingering off-balance-sheet transactions that have distorted the link between production and earnings.
Under the current NNPCL leadership, analysts note improvements in transparency, though they stress that full disclosure of crude-pledge deals remains essential to restore confidence in oil-revenue reporting.
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Several described the situation as a powerful reminder of the long-term consequences of mortgaging future crude supply to meet short-term fiscal needs.
