Nigeria’s crude oil production in 2025 saw nearly 15% of output effectively pre-committed to servicing crude-backed loan facilities, amounting to N8.36tn ($5.6bn) in value. Analysis of Nigerian National Petroleum Company Limited (NNPC) financial disclosures and official production data shows that four major forward-sale agreements — Project Gazelle, Project Yield, Project Leopard, and Eagle Export Funding — collectively accounted for 213,000 barrels of crude per day. Over the year, this would translate to 77.75 million barrels of crude dedicated to debt obligations before revenue could fully reach government coffers.
The largest commitments are linked to Project Gazelle, which financed advance tax and royalty payments, requiring sustained deliveries of 90,000 barrels daily, and Project Yield, which supported the Port Harcourt Refinery upgrade with 67,000 barrels per day. Project Leopard and Eagle Export Funding contributed 35,000 and 21,000 barrels per day respectively. These arrangements illustrate how crude-for-cash deals and forward sales have become central to NNPC’s funding strategy amid fiscal pressure, declining investment, and fluctuating production.
Several of these facilities were structured to refinance legacy debts, improve cash flow, and fund strategic projects such as refinery rehabilitation. For instance, Eagle Export Funding’s ongoing tranche, valued at $900m, began repayment in June 2024 and is scheduled to mature in 2028. Similarly, gas supply financing from Nigeria LNG Limited has an outstanding commitment of N472bn, adding to the broader fiscal weight of forward-sale arrangements. Analysts note that such arrangements reduce immediate oil revenue inflows, constraining budget planning and economic flexibility.
Industry experts have raised concerns about transparency in crude-backed financing. AHA Strategies’ CEO, Ademola Adigun, warned that opaque arrangements obscure the true scale of revenue diversion, while CSA Advisory’s Dr. Aliyu Ilias highlighted the growing complexity of Nigeria’s crude trading structure involving swaps and oil-to-naira deals. Meanwhile, Dr. Muda Yusuf of the Centre for the Promotion of Private Enterprise observed that forward-sale deals signed under previous administrations continue to impact current earnings, although recent NNPC management has improved disclosure and professionalism.
Despite producing 530.41 million barrels in 2025, Nigeria missed its OPEC quota for most of the year, reinforcing the need for stable output and price performance to safeguard oil-dependent revenues. The N8.36tn tied up in crude-for-loan deals underscores how debt obligations can divert substantial portions of production, making transparency, parliamentary oversight, and careful structuring of forward sales crucial to sustaining Nigeria’s fiscal health and restoring confidence in oil revenue reporting.
source: punch