NNPCL Faces Mounting Pressure Over ₦8.07tn Crude-for-Loans Debt Exposure
NNPCL is currently grappling with an enormous N8.07 trillion in obligations related to crude-for-loan (forward-sale and project-financing) agreements, as revealed in its 2024 financial statements.
These liabilities stem from several arrangements used to refinance older debts, fund refinery rehabilitation, support cash-flow, and meet government revenue obligations.
Major among these are facilities such as:
- Project Gazelle, which saw NNPCL draw N4.9 trillion out of a N5.1 trillion facility by end-2024, but delivered only N991 billion in crude — leaving N3.8 trillion outstanding.
- Project Yield, used for upgrading the Port Harcourt refinery — NNPCL had drawn N1.4 trillion by end-2024, with repayments due to start mid-2025.
- Project Leopard, another forward-sale deal with N1.3 trillion outstanding.
All told, these contracts commit Nigeria to deliver some 213,000 barrels of crude per day — a substantial portion of the country’s daily output — just to service loan obligations.
Implications: Revenue, Crude Supply, and Fiscal Pressure
Because so much of Nigeria’s crude output is already pledged to debt-repayment, the capacity to generate fresh export revenue or supply domestic refineries is constrained.
Despite modest gains in oil production in 2024, government revenue from crude sales dropped sharply: gross profit from crude and gas sales fell by about ₦824.66 billion compared with the previous year.
Analysts warn that such heavy reliance on crude-backed financing — especially when many deals originate from periods of fiscal stress — leaves NNPCL, and by extension Nigeria’s economy, exposed to fluctuations in oil production, global oil prices, and structural inefficiencies.
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