The Nigerian National Petroleum Company Limited (NNPCL) is burdened with crude-backed loan obligations estimated at ₦8.07 trillion, according to an analysis of its 2024 financial statements and capital-commitment disclosures.
The liabilities stretch across multiple forward-sale and project-financing arrangements that are expected to be serviced through substantial crude oil and gas deliveries. The commitments have become a major pillar of NNPCL’s funding structure following years of fiscal pressure, volatile crude production, and declining upstream investment.
Several of the facilities were used to refinance older debts, fund refinery rehabilitation, support cash flow, and meet government revenue obligations.
One of the major exposures is tied to the Eagle Export Funding arrangement. Although the 2024 financial statement notes that “at least 1.8 million barrels” must be delivered per cycle, earlier reporting shows the facility consists of three separate loan tranches.
The first, a $935 million loan obtained in 2020 and backed by 30,000 barrels per day, was fully repaid by September 2023. A second tranche of $635 million was also cleared within the same period. The only outstanding portion is the Project Eagle Export Funding Subsequent 2 Debt, a $900 million facility secured in 2023 and pledged against 21,000 barrels per day.
Repayment is scheduled to begin in June 2024, with final maturity expected in 2028. As of December 2024, the outstanding balance stood at ₦1.1 trillion, making Eagle one of the company’s significant forward-sale exposures.
“The Company had capital commitments of N1.1tn as at the year ended 31 December 2024 (31 December 2023: N1.2tn). This relates to the forward sale agreement with Eagle Export Funding Limited for the delivery of Crude Oil.
“Under the contract, Eagle Export Funding Limited will make an upfront payment to NEPL for crude in a Forward Sale Agreement. The payment received is required to be settled with the delivery of crude oil volumes, i.e., NEPL sells crude to Eagle Export Funding Limited based on a delivery schedule.
“Based on the agreement, at least 1,800,000 barrels of Crude oil must be nominated and scheduled by NEPL (and delivered at the relevant delivery terminal to Eagle Export Limited in every delivery period commencing on 28 August 2020,” the company’s financial statement read.
Another major obligation arises from the incremental gas-supply financing arrangement with Nigeria LNG Limited. Under the agreement, NLNG provided upfront funding of ₦772 billion for gas supplies to be delivered over time.
By the close of 2024, gas worth ₦535 billion had been drawn and ₦312 billion recovered by NLNG, leaving ₦460 billion yet to be supplied. A financing charge of ₦12 billion also accrued in the period, bringing the total outstanding balance to ₦472 billion.
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 ₦1.4 trillion 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.
“It is secured with a forward sale of refined product equivalent of 67kbpd of crude oil. As of 31 December 2024, the amount drawn is N1.4tn with principal repayment to commence in June 2025 after a moratorium period of 2 years and 6 months.
Therefore, loan commitment as of 31 December 2024 is N1.4tn,” the financial statement read.
The PUNCH
