The Nigerian National Petroleum Company Limited (NNPC Ltd) has disclosed N8.2 trillion in liabilities arising from forward crude oil sale agreements as of the end of 2025. This figure represents a significant portion of the company's total contract liabilities, which stood at N8.69 trillion in its 2025 audited financial statements. The forward-sale agreements have enabled NNPC to obtain upfront funding against future crude oil deliveries.
NNPC has committed 186,000 barrels per day (bpd) to servicing these liabilities, including interest. The company recorded N847.6 billion in interest relating to contract liabilities during 2025. These arrangements allow NNPC to receive immediate liquidity but create obligations that must be settled through future crude deliveries and associated financing costs. The company's financial statements reveal the extent to which future crude production has been committed under financing and prepayment arrangements.
One of the notable arrangements is Project Gazelle, a crude-backed financing structure initiated in 2023. Under this agreement, NNPC committed to supply 90,000 bpd of crude oil from Production Sharing Contract (PSC) assets. The financing was used to fund advance payments of future tax and royalty obligations due to the Federation. By December 2024, N4.9 trillion had been drawn from a N5.1 trillion facility, with crude valued at N991 billion lifted, leaving a balance of about N3.8 trillion.
In addition to Project Gazelle, NNPC has other forward-sale financing obligations, including Project Leopard and Project Leopard II. These arrangements involve the forward sale of 35,000 bpd and 61,250 bpd, respectively, representing commitments covering 96,250 bpd of future crude production. The scale of these arrangements raises important financial questions about NNPC's future crude production and its ability to service existing financing obligations.
Group Chief Executive Officer, Bashir Bayo Ojulari, discussed NNPC's 2025 audited results in Abuja, stating that Project Gazelle remains active until its obligations are fully settled. He emphasized that the arrangement relates to PSCs rather than joint ventures, which is an important distinction. According to Ojulari, the facility will remain in place until it is paid off, although the repayment period may change depending on crude prices and production levels.
Ojulari noted that a lower crude price or lower production does not eliminate the obligation but could affect the period over which the financing remains outstanding. This provides context for the liability disclosed in the financial statements, highlighting the potential impact on NNPC's future cash flows. The company's 2025 results show that it remained profitable, recording N7.2 trillion in profit after tax, despite a decline in revenue to N34.5 trillion from N45.1 trillion in 2024.
The N8.2 trillion forward-sale liability is a significant contractual obligation tied to future crude deliveries, deserving close attention. While the audited accounts do not establish wrongdoing, the liability represents a substantial commitment that must be serviced through future crude production. NNPC's operating cash flow was N12.8 trillion, and the company's financial statements provide insight into Nigeria's oil finances, particularly the extent to which future crude output is already committed.
Key points
- NNPC has N8.2 trillion in liabilities from forward crude oil sale agreements.
- The company has committed 186,000 bpd to servicing these liabilities.
- Project Gazelle, one of the arrangements, involves supplying 90,000 bpd of crude oil from PSC assets.
