KEY POINTS
- NNPCL’s crude-backed loan obligations have risen to N8.07tn, tying over 213,000 barrels per day of oil to long-term debt repayments.
- Major exposures include the Eagle, Yield, Leopard and Gazelle financing structures, alongside a sizeable gas-supply debt with NLNG.
- Analysts warn that these arrangements restrict Nigeria’s export earnings and leave the national oil company vulnerable to production shortfalls.
The Nigerian National Petroleum Company Limited, NNPCL, is confronting an increasingly heavy debt burden, with crude-backed loan obligations now estimated at N8.07tn.
The figure, drawn from the company’s 2024 financial statements and disclosures on capital commitments, offers one of the clearest indications yet of how much of Nigeria’s future oil production is already committed to debt repayment.
Over the past several years, the company has leaned heavily on forward-sale arrangements and project-linked financing to navigate shrinking upstream investment, uncertain production levels, and persistent fiscal pressure. What began as a means of stabilising cash flow and refinancing old obligations has evolved into a central pillar of NNPCL’s funding model, effectively tying chunks of its crude output to lenders for years ahead.
A major portion of the exposure stems from the Eagle Export Funding structure. Though NNPCL’s 2024 accounts simply note that at least 1.8 million barrels must be delivered for each cycle, earlier reporting shows the Eagle arrangement is composed of three tranches.
Two of them, worth $935m and $635m, were obtained in 2020 and have since been cleared. The last tranche, a $900m loan secured in 2023 and backed by 21,000 barrels per day, remains active. Repayment is scheduled to begin in June 2024 and stretch through to 2028.
By the end of 2024, NNPCL still owed N1.1tn under the Eagle structure. The company’s accounts explain that Eagle Export Funding Limited paid for the barrels upfront under a forward-sale deal; NNPCL’s upstream subsidiary, NEPL, is obligated to supply the crude over a defined schedule. The agreement demands that at least 1.8 million barrels be nominated and delivered each period, a commitment that has shaped NEPL’s production planning since 2020.
A separate obligation is tied to the incremental gas-supply financing deal with Nigeria LNG Limited. Under that arrangement, NLNG advanced N772bn to support gas deliveries. By late 2024, NNPCL had drawn gas worth N535bn, of which NLNG recovered N312bn. That left N460bn in gas still to be supplied, in addition to N12bn in financing charges, pushing the total outstanding balance to N472bn.
Refinery Overhauls Add Another Layer of Crude-Backed Commitments
The refinery rehabilitation drive has added some of the heaviest liabilities to NNPCL’s books. Project Yield, the financing package organised for the Port Harcourt Refinery upgrade, carried an outstanding N1.4tn drawdown by December 2024. The seven-year facility, secured in October 2022, was structured against a forward sale of refined-product-equivalent volumes amounting to 67,000 barrels per day. Repayment is set to start in June 2025 after a two-and-a-half-year moratorium.
The company’s accounts note that the N1.5tn loan was primarily aimed at supporting the engineering, procurement and construction work being executed by Tecnimont. The size of the drawdown so far means the entire commitment remains on NNPCL’s books as a binding obligation heading into 2025.
Alongside this sits Project Leopard, another crude-secured forward-sale arrangement with an outstanding balance of N1.3tn. That five-year contract requires the company to supply 35,000 barrels per day, with repayments expected to begin around mid-2025 following a short moratorium period.
The largest pressure point, however, is Project Gazelle. The structure was used to raise funds for advance tax and royalty payments tied to Production Sharing Contract assets. By the end of 2024, NNPCL had drawn N4.9tn out of the N5.1tn package. Only crude worth N991bn had been delivered, leaving an outstanding N3.8tn. Gazelle demands regular deliveries of 90,000 barrels per day until the facility is fully settled.
When combined, the major crude-for-loan deals, Eagle (21,000 bpd), Project Yield (67,000 bpd), Project Leopard (35,000 bpd) and Project Gazelle (90,000 bpd), add up to 213,000 barrels per day. That volume, which excludes the separate gas commitments to NLNG, represents a significant share of Nigeria’s daily crude production and reduces the pool of barrels available for direct export earnings.
Analysts say the growing dependence on such structures exposes NNPCL to market volatility and output instability, particularly in an environment where Nigeria has struggled to meet production targets. They warn that tying crude to forward sales limits fiscal flexibility at a time the government is desperate to boost revenue.
