The Nigerian National Petroleum Company Limited (NNPCL) is carrying crude-backed loan obligations worth N8.07 trillion, according to an analysis of its 2024 financial statements and capital commitment disclosures. These liabilities span multiple forward-sale and project financing arrangements that must be serviced through substantial crude oil and gas deliveries.
The commitments have become a central pillar of NNPCL’s funding structure after years of fiscal pressure, volatile crude production, and declining upstream investment. Several facilities were used to refinance older debts, fund refinery rehabilitation, support cash flow, and meet government revenue obligations.
The scale of these arrangements raises questions about how much of Nigeria’s daily crude output is actually available to generate fresh revenue for the Federation Account, rather than being pre-committed to debt servicing.
Eagle Export Funding Arrangement Accounts for N1.1tn Debt
One of NNPCL’s major exposures is tied to the Eagle Export Funding arrangement. The 2024 financial statement notes that “at least 1.8 million barrels” must be delivered per cycle, though the facility actually consists of three separate loan tranches.
The first tranche, a $935m loan obtained in 2020 and backed by 30,000 barrels per day, was fully repaid by September 2023. A second tranche of $635m was also cleared within the same period. The only outstanding portion is the Project Eagle Export Funding Subsequent 2 Debt, a $900m facility secured in 2023 and pledged against 21,000 barrels per day.
Repayment began in June 2024, with final maturity expected in 2028. As of December 2024, the outstanding balance stood at N1.1tn, making Eagle one of the company’s significant forward-sale exposures.
The arrangement requires NNPCL to nominate and schedule crude deliveries to Eagle Export Limited at relevant delivery terminals for every delivery period. This creates a continuous drain on crude volumes that might otherwise be sold on the open market at potentially better prices.
NNPCL Gas Supply Deal with NLNG Creates N472bn Liability
Another major obligation arises from the incremental gas supply financing arrangement with Nigeria LNG Limited. Under the agreement, NLNG provided upfront funding of N772bn for gas supplies to be delivered over time.
By the close of 2024, gas worth N535bn had been drawn and N312bn recovered by NLNG, leaving N460bn yet to be supplied. A financing charge of N12 billion also accrued during the period, bringing the total outstanding balance to N472 billion.
This arrangement is separate from NNPCL’s crude oil commitments but adds another layer of production obligations that must be met regardless of market conditions or operational challenges.
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Port Harcourt Refinery Rehabilitation Backed by N1.4tn Crude Loan
The refinery rehabilitation programme accounts for some of the largest crude-secured debt commitments. Project Yield, the financing structure backing the Port Harcourt Refinery upgrade, had an outstanding drawdown of N1.4tn at the end of 2024.
The agreement requires NNPCL to deliver refined product equivalent volumes of 67,000 barrels per day, with repayment scheduled to begin in June 2025 after a two-and-a-half-year moratorium.
“This is a 7-year N1.5tn PxF loan obtained in October 2022 for general corporate purposes with the ultimate use being the execution of the EPC Contract between PHRC and Tecnimont for the rehabilitation of Port Harcourt Refinery,” the financial statement explained.
The loan is secured with a forward sale of refined product equivalent of 67,000 barrels per day of crude oil. As of 31 December 2024, N1.4tn had been drawn, with principal repayment commencing in June 2025.
Project Leopard and Project Gazelle Add N5.1tn to NNPCL Debt Burden
Project Leopard, another crude-backed forward sale facility, carried an outstanding balance of N1.3tn. The five-year financing agreement commits the company to deliver 35,000 barrels of crude oil per day, with repayments expected to commence in mid-2025 following a six-month moratorium.
The most significant exposure is tied to Project Gazelle, a large crude-for-cash arrangement used to finance advance tax and royalty payments on Production Sharing Contract assets. NNPCL had drawn N4.9tn out of the total N5.1tn facility by December 2024.
Crude valued at N991bn had been delivered, leaving an outstanding N3.8tn. The agreement requires sustained deliveries of 90,000 barrels per day until the liability is fully extinguished.
NNPCL Must Deliver 213,000 Barrels Daily to Service Debt
When assessed together, the company’s major crude for loan facilities represent a combined commitment of 213,000 barrels per day, in addition to separate gas delivery obligations under the NLNG arrangement.
The breakdown is as follows: Eagle Export Funding (21,000 bpd), Project Yield (67,000 bpd), Project Leopard (35,000 bpd) and Project Gazelle (90,000 bpd).
This volume equates to a sizeable share of Nigeria’s daily crude output, underscoring the long-term implications of these arrangements for government revenue, export allocation and operational flexibility.
Nigeria’s crude output fluctuated between 1.4 and 1.6 million barrels per day in 2024, below the 1.78 million barrels per day target used in the budget. This means the debt servicing commitments account for roughly 13 to 15 per cent of total daily production.
Nigeria’s Crude Oil Revenue Plunged Despite Production Increase
The PUNCH earlier reported that Nigeria’s gross profit from crude oil and gas sales plunged by N824.66bn in 2024 despite a rebound in oil production, according to figures from the latest Budget Implementation Report for the fourth quarter of 2024.
Gross profit from crude and gas sales fell to N1.08tn during the year, from N1.90tn in 2023, representing a 43.32 per cent decline. The 2024 performance was also 26.3 per cent below the government’s budgeted target of N1.46tn.
Despite being the country’s traditional fiscal anchor, gross profit from crude oil and gas sales accounted for only about eight per cent of total oil and gas revenue in 2024, highlighting a structural shift in government earnings toward taxes, royalties and penalties.
The World Bank said earlier this year that NNPC was remitting only half of the financial gains from the removal of petrol subsidies due to debt arrears. Out of N1.1tn revenue from crude sales and other income in 2024, NNPC remitted only N600bn, leaving a deficit of N500bn unaccounted for.
Experts Demand Transparency on NNPCL Crude-for-Cash Arrangements
Ademola Adigun, Chief Executive Officer of AHA Strategies and an oil and gas expert, linked Nigeria’s declining oil earnings to opaque crude-for-cash agreements and undisclosed loan repayments that have tied up part of the country’s crude output.
“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,” Adigun said.
He explained that several crude-backed projects, such as Project Gazelle, were carried out without proper public disclosure or parliamentary scrutiny. He added that the Nigeria Extractive Industries Transparency Initiative should strengthen its audits to determine how much of the country’s crude is being used for debt repayment or swap transactions.
Development economist and Chief Executive Officer of CSA Advisory, Dr Aliyu Ilias, said Nigeria’s crude trading structure had become increasingly complex, involving swaps and oil-to-naira exchanges that might not be fully accounted for. He urged the government to commission a study on how such short-term crude transactions affect fiscal performance.
Dr Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise, recalled that during the tenure of former Central Bank Governor Godwin Emefiele, several forward sale deals were signed to raise emergency funds when the government faced fiscal pressure.
“During the Emefiele years, Nigeria committed a lot of its crude upfront. Those forward sales are still eating into our current earnings,” Yusuf said.
He noted, however, that transparency and professionalism within NNPCL had improved under the current administration of Bayo Ojulari. “Under the new management of the NNPCL, there’s better professionalism and openness,” he said.
He added that the government must disclose the full details of its crude swap and forward sale agreements to restore confidence in oil revenue reporting. Without that transparency, it remains difficult to understand why rising production hasn’t translated into proportional increases in government revenue.
