The Nigerian National Petroleum Company Limited (NNPCL) is facing a massive financial challenge. Analysis of its 2024 financial statements reveals crude-backed loan obligations estimated at N8.07 trillion.
These liabilities are tied to complex forward-sale agreements. To service the debt, the company must deliver substantial volumes of crude oil daily. These commitments have become a central pillar of NNPCL’s funding strategy amidst fiscal pressure.
The Anatomy of the Debt
The N8.07tn burden spans several major facilities. These funds were used for debt refinancing, refinery rehabilitation, and government revenue obligations.
Key Loan Commitments:
-
Project Gazelle: The largest exposure with N3.8tn outstanding. It requires 90,000 barrels per day (bpd).
-
Project Yield: Backing the Port Harcourt Refinery upgrade with N1.4tn outstanding. It commits 67,000 bpd.
-
Project Leopard: A forward-sale facility with N1.3tn outstanding, requiring 35,000 bpd.
-
Eagle Export Funding: The remaining tranche stands at N1.1tn, pledged against 21,000 bpd.
Additionally, the company holds a significant gas-supply financing obligation. This deal with Nigeria LNG Limited carries an outstanding balance of N472 billion.
Impact on National Production
When aggregated, these facilities commit a total of 213,000 barrels per day of Nigeria’s oil output.
Declining Fiscal Inflows
The weight of these obligations coincides with a sharp drop in profits. Data from the Budget Office indicates that gross profit from crude sales plunged by 43 percent in 2024.
Despite a modest recovery in production volumes, fiscal inflows remain weak. The shortfall is attributed to under-recovery costs and the diversion of crude to service these debts.
Expert Reactions
Industry stakeholders have raised concerns about transparency. Ademola Adigun, CEO of AHA Strategies, linked the decline in earnings directly to these agreements.
“Some of our crude is already tied up in loan agreements,” Adigun stated. “The problem is that Nigeria doesn’t know the full details.”
Analysts note that many forward-sale deals were signed during periods of fiscal desperation. Consequently, they urge the government to disclose full details to restore public confidence.
READ ALSO: Netanyahu Requests Presidential Pardon to End Corruption Trial
