The Nigerian National Petroleum Company Limited (NNPCL) may be able to fulfil its crude-for-loan obligations till 2029 due to the growing demand for oil by domestic refineries.
A number of crude-for-loan agreements that have linked the nation’s oil production volumes to different financial obligations are the source of NNPCL’s debt load.
This is because the local demand for oil has been increasing since the Port Harcourt and Warri refineries, as well as the massive $20 billion Dangote Petroleum Refinery in Lagos, went onstream.
Last week, the Nigerian Upstream Petroleum Regulatory Commission also disclosed that between January and June 2025, 123,480,500 barrels of crude oil would be needed for the operational refineries in Port Harcourt, Dangote, Warri, and other locations.
In light of the national oil company’s crude-for-loan commitments, this indicates that the demand for crude from domestic refiners has increased.
The NNPCL has committed 272,500 barrels of crude oil per day through a series of crude-for-loan agreements totalling $8.86 billion, according to the findings.
The national oil company will use roughly 8.17 million barrels of petroleum per month for various loan agreements, based on its pledge of 272,500 barrels per day.
The Nigeria Extractive Industries Transparency Initiative’s report and the NNPCL’s financial accounts were analysed to support this claim.
Notable initiatives under these agreements include Project Yield, Project Gazelle, Project Eagle Export Funding (Original, Subsequent, and Subsequent 2 Debts), Project Panther, and Project Bison.
As to the data, NNPC has already paid back at least $2.61 billion in loans, which accounts for 29.4% of the entire credit facility. As of June 2024, $6.25 billion, or 70.6%, was still owed.
One of the most prominent contracts, Project Panther, entails a $1.4 billion facility obtained in 2022 from Chevron Nigeria Limited and a group of commercial banks.
The loan, which has a seven-year term and a 2029 maturity date, has already drawn $359 million from NNPCL.
Due to the agreement’s provision for a moratorium before principal repayments start, no repayment has been paid.
In return, 23,500 barrels of crude oil per day have been pledged as security. The financing terms include a 5.5 percent margin, a one percent liquidity premium, and a three-month SOFR rate.
In order to purchase a 20% ownership part in the Dangote Refinery, NNPCL obtained a $1.04 billion pre-export financing arrangement in 2021 under the name Project Bison.
NNPCL had to commit to 35,000 barrels of crude oil per day as part of the agreement, which was to be paid back in full by June 28, 2024.
As it limited the amount of crude oil accessible for nearby refineries, this highlighted the difficulties associated with utilising oil assets as collateral, even though it was a major milestone in building a vital piece of infrastructure.
Project Eagle, which includes several export finance tranches, is another noteworthy financial agreement.
The initial $935 million tranche was acquired in 2020 with a five-year maturity period. It was fully returned by September 15, 2023, and needed a daily pledge of 30,000 barrels of crude oil.
Nevertheless, the financial hardship was increased by later tranches. With a maturity date of 2028, a larger $900 million tranche that was secured in 2023 replaced a $635 million tranche that was similarly pledged and paid back by September 2023.
With 21,000 barrels of crude oil per day offered as collateral, repayment of this tranche began in June 2024 after a 12-month embargo.
