The Nigerian National Petroleum Company Limited (NNPC Ltd) has pledged more than N9 trillion through forward-sale agreements, pre-export financing, and refinery-linked commitments, effectively using future oil production to meet current funding requirements.
The 2024 Audited Financial Statement (AFS) released on Monday highlights that NNPC has relied heavily on crude-for-cash arrangements in recent years, with three major initiatives—Project Yield, Project Gazelle, and Project Leopard—accounting for roughly N6.9 trillion of the total commitments.
Forward-sale agreements allow NNPC to secure immediate funding by promising to deliver specified crude volumes at pre-agreed prices in the future. While this approach addresses short-term liquidity needs, analysts warn it carries risks, including reduced revenue flexibility, production pressures, and a debt-like effect on future oil output.
Project Yield, tied to the ongoing rehabilitation of the Port Harcourt Refinery, involved a N1.5 trillion facility, of which N1.4 trillion had been drawn as of October 2022. The refinery, still non-operational despite multiple rehabilitation efforts, is now seeking new equity partners to either “highgrade” or repurpose the facility. Additional equity commitments include a 10% stake in African Refinery Port Harcourt Limited, with plans to increase to 15% through a 5% “sweat equity.” Completion is targeted for 2028.
Project Gazelle, initiated in December 2023 and later expanded, secured up to N5.1 trillion and requires NNPC to supply 90,000 barrels per day from Production Sharing Contract (PSC) assets over five years. By the end of 2024, NNPC had drawn N4.9 trillion, but only N991 billion worth of crude had been delivered, leaving a substantial portion of the future production committed.
Similarly, Project Leopard, launched in December 2024, is tied to N3.1 trillion in financing for supplying 35,000 barrels per day over five years. By December 2024, NNPC had drawn N1.3 trillion, with repayment scheduled to start in June 2025. Combined, Projects Gazelle and Leopard account for 125,000 barrels per day of future production, highlighting the pressure to increase crude output.
Beyond crude-backed deals, NNPC has committed funds to the incremental gas supply agreement with NLNG/NEPL, totaling N772 billion, with N535 billion drawn and an outstanding balance of N460 billion remaining as of December 2024. Additional refinery stakes include a 10% sweat-equity in the proposed 20,000 bpd Clairgold Refinery in Delta State, with completion projected for 2027.
The report also confirmed that previous pre-export financing obligations under PX1 and PX2 were cleared through forward sales to Eagle Export Limited, though some delivery commitments under NEPL’s schedule dating back to 2020 remain.
This financial disclosure marks one of the first comprehensive public accounts of NNPC’s crude-forward sale obligations, reflecting a growing reliance on future oil streams to fund both ongoing and legacy projects.
