The Nigerian National Petroleum Company Limited has serviced part of its $3 billion forward-sale loan from the African Export-Import Bank with crude oil worth ₦991 billion in 2024, according to its 2024 financial statement report. The repayment was tied to Project Gazelle, a forward crude oil supply agreement signed in 2023.
On August 17, 2023, the NNPC announced it had secured a $3.3 billion emergency loan to repay crude oil obligations from Afreximbank. It explained that the loan would be used by the oil company to support the Federal Government in stabilising Nigeria’s exchange rate.
“The NNPC Ltd. and AFREXIM bank have jointly signed a commitment letter and Termsheet for an emergency $3bn crude oil repayment loan,” NNPC said in a statement.
“The signing, which took place today at the bank’s headquarters in Cairo, Egypt, will provide some immediate disbursement that will enable the NNPC Ltd. to support the Federal Government in its ongoing fiscal and monetary policy reforms aimed at stabilising the exchange rate market,” it added.
Under the deal, NNPC committed to deliver 90,000 barrels of crude oil per day from Production Sharing Contract assets to back a funding facility. According to the 2023 financial statement, a drawdown of $2.25 billion had already been achieved by 31st December 2023, with principal repayment scheduled to begin in June 2024.
The funding carried an interest rate of 3-month LIBOR plus 6.5 per cent, with a 6 per cent margin and 0.5 per cent liquidity premium.
According to the 2024 financial statement, the drawdown on the facility had reached ₦4.9 trillion out of a total available ₦5.1 trillion, while ₦991 billion worth of crude oil had been lifted in repayment, leaving an outstanding balance of ₦3.8 trillion at the end of 2024.
The report read, “In December 2023, NNPC Limited entered into a forward sale agreement with Project Gazelle Funding Limited to supply 90,000 bbl. of crude oil per day from Production Sharing Contract Assets for the settlement of a 5-year N2.7tn funding.
“The funding was utilised by the company to finance an advance payment of future taxes and royalty obligations due to the federation on PSC assets managed by the Company on behalf of the Federation.
“As at 31st December 2024, a drawdown of N4.9tn has been achieved from the initial facility of N5.1tn. The interest rate for the facility is 3-month SOFA plus 6.5 per cent while the margin and Liquidity Premium of 0.5 per cent respectively. A total value of Crude Oil worth N991bn has been lifted with a balance of N3.8tn as at 31st December 2024.”
The repayment was made between June and December 2024. However, NNPC did not disclose the identity of the offtakers or exact delivery volumes fulfilled in 2024.
The Project Gazelle arrangement has become one of NNPC’s most significant forward-sale financing vehicles, following a trend of oil-backed loans designed to shore up government revenues, refinance legacy debts, and meet budgetary obligations amid limited fiscal buffers.
The PUNCH
