The Nigerian National Petroleum Company Limited may continue servicing its crude-for-loan obligations till 2029 as the demand for oil by domestic refineries increases.
NNPCL’s debt burden arises from several crude-for-loan agreements that have tied volumes of the country’s oil production to various financial commitments.
This is as the local demand for crude has continued to rise following the coming onstream of the Port Harcourt and Warri refineries, alongside the mega $20bn Dangote Petroleum Refinery located in Lagos.
Also, the Nigerian Upstream Petroleum Regulatory Commission revealed last week that the Port Harcourt, Dangote, Warri, and other functional refineries would require 123,480,500 barrels of crude oil between January and June 2025.
This means the demand for crude by indigenous refiners has continued to rise amid the crude-for-loan obligations of the national oil company.
Findings showed that the NNPCL has pledged 272,500 barrels per day of crude oil through a series of crude-for-loan deals totalling $8.86bn.
Pledging 272,500 barrels daily means that about 8.17 million barrels of crude will be used for different loan deals by the national oil firm monthly.
This is according to an analysis of a report by the Nigeria Extractive Industries Transparency Initiative and the NNPCL’s financial statements.
Under these deals, notable projects include Project Panther, Project Bison, Project Eagle Export Funding (Original, Subsequent, and Subsequent 2 Debts), Project Yield, and Project Gazelle.
According to newsmen findings, NNPC has already repaid at least $2.61bn in loans, representing 29.4 per cent of the total credit facility, while $6.25bn or 70.6 per cent, remained outstanding as of June 2024.
One of the most notable agreements, Project Panther, involves a $1.4bn facility secured in 2022 from a consortium of commercial banks and Chevron Nigeria Limited.
With a maturity date of 2029, the loan carries a seven-year tenor and has seen NNPCL draw $359m so far.
However, no repayment has been made as the deal allows for a moratorium period before principal repayments commence.