Nigeria’s growing reliance on crude-backed loans has placed an estimated N8.36tn worth of oil revenue under debt-servicing commitments in 2025, raising fresh concerns about fiscal sustainability amid persistent budgetary pressure.
A review of the 2024 financial statements of the Nigerian National Petroleum Company Limited and production data from the Nigerian Upstream Petroleum Regulatory Commission indicates that about 14.66 per cent of the country’s total crude output last year was effectively earmarked for loan repayment.
Four major crude-secured facilities - Project Gazelle, Project Yield, Project Leopard and Eagle Export Funding - account for a combined 213,000 barrels of crude oil per day committed to forward-sale and repayment arrangements. If sustained across the year, this translates to roughly 77.75 million barrels.
Official data show that Nigeria produced 530.41 million barrels of crude oil between January and December 2025. The 77.75 million barrels tied to debt servicing therefore represent nearly one-seventh of annual production.
Using the 2025 average Bonny Light price of $72.08 per barrel, the committed crude volume amounts to about $5.60bn. At the official exchange rate of N1,492 to the dollar, the gross value stands at approximately N8.36tn.
Although this figure reflects the market value of oil allocated to loan servicing rather than direct cash deductions, it highlights the significant share of output already pledged before revenues flow fully into government accounts.
One of the continuing obligations is the Eagle Export Funding facility. While earlier tranches of $935m and $635m secured in 2020 were fully repaid by September 2023, a subsequent $900m facility obtained in 2023 remains outstanding. The loan is backed by 21,000 barrels per day and is expected to mature in 2028. As of December 2024, its outstanding balance stood at N1.1tn.
Under the agreement, NNPC is required to deliver crude oil in scheduled tranches to offset upfront payments received under the forward-sale structure.
In addition to crude obligations, NNPC also maintains a gas-supply financing arrangement with Nigeria LNG Limited. NLNG advanced N772bn for future gas deliveries. By the end of 2024, N535bn worth of gas had been supplied, while N312bn had been recovered, leaving an outstanding balance of N472bn after financing costs.
Refinery rehabilitation financing forms another significant component of crude-backed commitments. Project Yield, which supports the Port Harcourt Refinery upgrade, had drawn N1.4tn out of a N1.5tn facility by December 2024. The seven-year arrangement is secured by a forward sale equivalent to 67,000 barrels per day of crude, with principal repayment scheduled to begin in June 2025.
Project Leopard carries a separate N1.3tn balance and is backed by 35,000 barrels per day under a five-year repayment plan.
The largest exposure remains Project Gazelle, a crude-for-cash facility used to finance advance tax and royalty payments on Production Sharing Contract assets. Of the N5.1tn facility, N4.9tn had been drawn by the end of 2024. After crude deliveries valued at N991bn, an outstanding N3.8tn remains, secured against 90,000 barrels per day.
Together, these commitments underscore the extent to which Nigeria’s oil output is leveraged to support financing arrangements.
Nigeria generated an estimated N55.5tn in gross crude earnings in 2025, up from N50.88tn in 2024. However, analysts caution that these figures exclude production costs, joint venture obligations, domestic supply commitments and other deductions.
With production still fluctuating and often below OPEC targets, experts say improved transparency in crude-backed financing and forward-sale agreements is critical to safeguarding long-term revenue stability and restoring confidence in oil-sector reporting.
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