Servicing of Afreximbank Facility Extends Into 2024
Fresh details from the Nigerian National Petroleum Company Limited’s (NNPCL) 2024 financial statements show that the company continued to rely heavily on crude-oil-backed financing to manage state obligations and stabilise Nigeria’s foreign-exchange position.
According to the report, NNPCL applied crude worth N991bn in 2024 to service a forward-sale loan tied to Project Gazelle, one of the company’s largest and most strategic financing arrangements.
Background to the Gazelle Agreement
Project Gazelle emerged from a crude-for-cash deal signed in August 2023, when NNPCL announced it had secured a $3.3bn emergency loan from the African Export-Import Bank. At the time, the oil company said the financing was designed to help the Federal Government ease pressure on the foreign-exchange market and support broader monetary reforms.
Under the terms of the arrangement, NNPCL committed to delivering 90,000 barrels of crude per day from Production Sharing Contract (PSC) assets to back the loan. By the end of 2023, $2.25bn of the facility had already been drawn, with principal repayments scheduled to begin in mid-2024.
The loan carried an interest structure benchmarked against the 3-month LIBOR rate, with additional margins and liquidity fees.
Crude Deliveries and Outstanding Balances
The 2024 financials indicate that the company had drawn N4.9tn out of the N5.1tn available under the facility by December 2024. During the year, crude valued at N991bn was delivered as repayment, reducing the outstanding balance to N3.8tn.
While NNPCL confirmed the cash and crude flows, it did not disclose the identities of the offtakers that received the repayment volumes or the specific quantities supplied over the repayment period from June to December 2024.
Forward Sales as a Core Funding Tool
Project Gazelle is one of several oil-backed financing structures the national oil company has pursued in recent years as Nigeria grapples with fiscal strain, inconsistent crude production, and limited investment inflows.
Previous analyses have shown that NNPCL is currently tied to crude-delivery commitments associated with multiple facilities—including Eagle Export Funding (21,000 bpd), Project Yield (67,000 bpd), Project Leopard (35,000 bpd), and Project Gazelle (90,000 bpd). Together, these obligations represent 213,000 barrels per day, before accounting for additional gas-supply commitments under Nigeria LNG arrangements.
The volume represents a significant share of Nigeria’s daily output and underscores how oil-backed loans now shape both the company’s balance sheet and the nation’s export capacity.
Impact on National Revenue
The increasing allocation of crude toward debt servicing has raised concerns about Nigeria’s fiscal health. Government data from the Budget Office of the Federation shows that gross profit from crude oil and gas sales fell sharply in 2024 despite an uptick in production. Total gross earnings dropped from N1.90tn in 2023 to N1.08tn in 2024, a decline of over 43 per cent.
Experts warn that part of this fall can be traced to the diminishing volume of unencumbered crude available for sale.
Experts Flag Transparency Concerns
Energy analyst and CEO of AHA Strategies, Ademola Adigun, has repeatedly linked Nigeria’s declining oil receipts to opaque crude-for-cash deals and undisclosed repayment obligations. According to him, a significant portion of Nigeria’s crude is now tied up in loan settlements, limiting the revenue that flows into the Federation Account.
He argues that many of these deals, including Project Gazelle, have been concluded without adequate public disclosure or legislative oversight, deepening uncertainty around Nigeria’s true production and revenue position.
Adigun emphasises that the Nigeria Extractive Industries Transparency Initiative (NEITI) must intensify its audits to determine how much crude is earmarked for loan repayment and how much is available for direct revenue generation.
A Growing Debate Over Oil-Backed Borrowing
As NNPCL continues to shoulder multitrillion-naira loan obligations backed by crude allocations, questions remain about the long-term implications for budgeting, foreign-exchange stability, and the country’s ability to respond to future market shocks.
For now, forward-sale arrangements remain a central pillar of the company’s financing strategy—one that offers short-term liquidity but constrains future revenue flow.