The Nigerian National Petroleum Company Limited has made significant progress in servicing its $3 billion forward-sale loan from the African Export-Import Bank. According to its 2024 financial statement, the company has repaid N991 billion worth of crude oil in 2024, tied to Project Gazelle, a forward crude oil supply agreement signed in 2023. The loan was secured to support the Federal Government in stabilizing Nigeria’s exchange rate.
The agreement involves the delivery of 90,000 barrels of crude oil per day from Production Sharing Contract assets to back a funding facility. By December 2023, a drawdown of $2.25 billion had been achieved, with principal repayment scheduled to begin in June 2024. The funding carries an interest rate of 3-month LIBOR plus 6.5 percent, with a 6 percent margin and 0.5 percent liquidity premium.
As of December 2024, the drawdown on the facility had reached N4.9 trillion out of a total available N5.1 trillion, with N991 billion worth of crude oil lifted in repayment, leaving an outstanding balance of N3.8 trillion. The repayment was made between June and December 2024, although the company did not disclose the identity of the offtakers or exact delivery volumes fulfilled in 2024.
Project Gazelle has become a significant forward-sale financing vehicle for the NNPC, following a trend of oil-backed loans designed to shore up government revenues, refinance legacy debts, and meet budgetary obligations. The company is burdened with crude-backed loan obligations estimated at N8.07 trillion, stretching across multiple forward-sale and project-financing arrangements.
The NNPC’s major crude-for-loan facilities represent a combined commitment of 213,000 barrels per day, in addition to separate gas-delivery obligations. 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 gross profit from crude oil and gas sales plunged by N824.66 billion in 2024, despite a rebound in oil production. The decline has been linked to opaque crude-for-cash agreements and undisclosed loan repayments that have tied up part of the country’s crude output. Experts have called for greater transparency around these transactions, emphasizing the need for the Nigeria Extractive Industries Transparency Initiative to strengthen its audits and determine how much of the country’s crude is being used for debt repayment or swap transactions.