₦airaland Forum

Firm repays $2.61bn, owes $6.25bn as Nigeria loses 264m crude barrels to theft, others

The Nigerian National Petroleum Company Limited has pledged 272,500 barrels per day of crude oil through a series of crude-for-loan deals totalling $8.86bn.

By pledging 272,500 barrels daily, it means that about 8.17 million barrels of crude will be used for different loan deals by the national oil firm on a monthly basis.

This is according to an analysis of a report by the Nigeria Extractive Industries Transparency Initiative and the NNPC’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 The PUNCH’s findings, NNPC has already fully repaid $2.61bn in loans, representing 29.4 per cent of the total credit facility, while $6.25bn or 70.6 per cent, remains outstanding.

Also, out of the $8.86bn credit facility, only about $6.97bn has been received from seven crude-for-loan deals.

One of the key projects, Project Panther, involves a joint venture between NNPC and Chevron Nigeria Limited, backed by international and local banks.

The project secured a $1.4bn loan facility, with 23,500bpd pledged to service the debt. Repayment is set to commence after a moratorium, with financing terms including an SOFR (Secured Overnight Financing Rate) plus 5.5 per cent margin and a liquidity premium.

Another significant deal is Project Bison, tied to NNPC’s attempt to acquire a 20 per cent equity stake in the Dangote refinery. However, the national oil company only acquired a 7.25 per cent stake.

The project secured a $1.04bn loan from Afrexim Bank, with 35,000 bpd pledged as collateral. NNPC fully repaid this loan in June 2024.

Project Eagle Export Funding comprises three separate loans aimed at meeting various financial obligations.

The original loan, secured in 2020 for $935m, was serviced with 30,000 bpd and was fully repaid by September 2023.

A subsequent loan of $635m was also fully repaid by the same period. The third tranche, known as Project Eagle Export Funding Subsequent 2 Debt, was secured in 2023 for $900m, with 21,000 bpd pledged. Repayment is scheduled to begin in June 2024, and the loan will mature in 2028.


Project Yield, designed to support the Port Harcourt Refining Company, involves a $950m loan, with 67,000 bpd pledged for repayment.

The repayment of the loan, secured in 2022, will begin in December. This seven-year facility is crucial to refurbishing the refinery and enhancing domestic refining capacity.

However, despite this crude-for-loan arrangement, The PUNCH reports that fuel production at the Port Harcourt refinery has yet to commence, despite multiple postponements as of August. Promises from the Federal Ministry of Petroleum Resources and NNPC have repeatedly fallen through.

More recently, there was the Project Gazelle deal, which aimed to stabilise Nigeria’s foreign exchange market.

In December 2023, NNPC secured a $3bn forward sale agreement, pledging 90,000bpd from Production Sharing Contract assets to cover future tax and royalty obligations.

As of the end of 2023, $2.25bn had been drawn from this facility, with repayments scheduled to begin by mid-2024.

These crude-for-loan deals come at a time when Nigeria is struggling to boost its oil production.

The NEITI 2022-2023 report revealed a significant decline in crude oil output, reaching the lowest levels in a decade. In 2022, the country produced 490.94 million barrels of crude oil, a steep drop from the peak of 798.54 million barrels in 2014.

Although production slightly improved to 537.57 million barrels in 2023, this still represents only 67.16 per cent of the country’s peak production capacity.

One of the major challenges facing the sector is production deferment. In 2023, Nigeria deferred 110.66 million barrels of crude oil, down from 153.44 million barrels in 2022.

The deferment was primarily due to unscheduled maintenance, repair issues, and oil theft.

Despite government efforts to curb these issues, including initiatives to reduce theft and sabotage, operational inefficiencies persist.

NEITI reported that oil theft and sabotage resulted in the loss of 5.25 million barrels in 2023, exacerbating production struggles.

The House of Representatives Special Joint Committee recently directed NNPC to halt further crude-for-loan agreements.


This directive follows reports that the company is planning to borrow an additional $2bn in oil-backed loans amid efforts to settle a $6bn backlog owed to international oil traders, particularly following the removal of fuel subsidy.

The PUNCH earlier reported that the NNPC was in talks for another oil-backed loan to boost its finances and allow investment in its business, according to the Group Chief Executive Officer, NNPC, Mele Kyari.

Kyari said the company wanted the new loan against 30,000-35,000 barrels per day of crude production, though he declined to say how much money it sought.

Nigeria’s government finances rely on oil the NNPC exports, which provides the bulk of crucial foreign exchange reserves. However, pipeline theft and years of underinvestment have sapped oil production in recent years, and the cost of fuel subsidies has further depleted cash reserves.

President Bola Tinubu has been struggling to implement reforms in Africa’s biggest oil exporter – including eliminating fuel subsidies and allowing the naira currency to trade close to market levels – without putting the country’s population at a cost-of-living breaking point.

On August 17, 2023, The PUNCH reported that the NNPC announced that it had secured a $3.3bn emergency crude oil repayment loan from the African Export-Import Bank.

It explained at the time that the oil company would use the loan to support the Federal Government in stabilising Nigeria’s exchange rate.

The facility, among other things, would help the Federal Government attend to some of its dollar obligations, assist the Central Bank of Nigeria in stabilising the foreign exchange market, and provide funding for NNPC.

Providing details about the deal in the document titled, “Everything you need to know about the NNPC Limited’s $3.3bn loan, also known as Project Gazelle,” NNPC said, “This is a financing agreement secured by NNPC Limited to prepay future royalties and taxes to the Federal Government.”

The company also stated that it adopted a lower price benchmark for the $3.3bn crude-for-cash loan to reduce the risk of default and ensure financial stability.

Giving details on the benchmark oil price, the company said the facility used a conservative crude price of $65/barrel to calculate the allocated crude to be produced and sold.

NNPC also said repayments were strategically planned and tied to future oil sales, with conservative pricing in oil sales contracts mitigating the risks associated with oil price volatility.

Amid the existing crude-for-oil deals, President Bola Tinubu approved the sale of crude to local refineries in naira and the corresponding purchase of petroleum products in naira. From October 1, NNPC commenced the supply of about 385,000 barrels per day of crude oil to the Dangote refinery, which would be paid for in naira.

Oil marketers have said that the Nigerian National Petroleum Company Limited portal used to purchase petrol has been shut against dealers, making it impossible for them to apply for the commodity purchase.

They said marketers are still awaiting over 90 million litres of petrol from the state-owned company. This is valued at about N79bn.

The PUNCH recalls that amid marketers’ complaints over their inability to order petrol, the NNPC confirmed the shutdown of its purchasing portal to our correspondent last month, giving its reasons.

According to NNPC spokesperson, Olufemi Soneye, the company shut the portal due to a significant backlog.

Soneye explained that the shutdown became necessary to stop NNPC from holding marketers’ capital for too long.

“We have a significant backlog to address. The closure is intended to prevent us from holding marketers’ funds for an extended period,” Soneye had explained.

He, however, assured marketers that the portal would be reopened after the backlog had been reduced.

Soneye explained that the shutdown became necessary to stop NNPC from holding marketers’ capital for too long.

“We have a significant backlog to address. The closure is intended to prevent us from holding marketers’ funds for an extended period,” Soneye had explained.

He, however, assured marketers that the portal would be reopened after the backlog had been reduced.

It will be reopened once the backlog has been sufficiently reduced. We are working to address it as soon as possible,” he told our correspondent.

Marketers who spoke with our correspondent confirmed that NNPC was expediting actions to clear the backlogs as of the weekend.

Though NNPC did not disclose the value of the ‘huge backlogs’, independent marketers said they have over 2,000 tickets yet to be cleared with NNPC.

In an interview, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, said the association is still waiting for the portal’s opening.

“They are on it, our marketers are still loading petrol from the NNPC. I can’t confirm the price now because the portal is still shut down.

“We have more than 2,000 tickets for 45,000 litres (of petrol). That is 45,000 multiplied by 2,000, you can now know the number of million litres it will be. This is just an estimate, you know I don’t work with NNPC and I don’t know what is on their system,” Ukadike stated.

He disclosed that a 45,000-litre truckload of PMS is around N39.5m, making N79bn when multiplied by 2,000.

The Petroleum Retail Outlets Owners Association of Nigeria also confirmed that its members could not access the NNPC purchasing portal.

PETROAN President, Billy Gillis-Harry, confirmed this in a phone conversation with our correspondent.

“The portal shutdown affects us too, we are all buying from NNPC,” he said briefly.

Meanwhile, the marketers noted that they have since been patronising private depot owners, who sell petrol to them at a premium.

This, they said, informed why the product is more expensive in their filling stations than in outlets owned by the NNPC and the major marketers.

Our correspondent gathered that the marketers usually bid for PMS through the NNPC portal.

According to them, payments will be made through the same channel while the marketer waits for months to get the product.

Independent marketers told The PUNCH that they paid for petrol but were not supplied after three months.

During an interview with The PUNCH in January, the National Vice President of IPMAN, Hammed Fashola, made a similar allegation which was denied by Soneye.

Fashola had asked the Federal Government to review the current distribution pattern to give priority to IPMAN members.

Fashola said, “We buy products from NNPC cash and carry. We don’t enjoy any credit facility with the NNPC. There are times when we pay for products, and you don’t get the products for two or three months. You have your money in the coffers of NNPC, which means they are trading with our money.

“If I am not exaggerating, we should be talking of over N300bn, when you consider the number of marketers all over Nigeria. Our money is always there, trapped, while we keep struggling to get fuel. The three days will turn into months if they don’t have products or they are out of stock, you have to wait, and your money will be there.”

At the moment, the marketers said they want to buy petrol directly from Dangote to ensure price parity.

The Federal Government is expanding its subsidised rice programme to alleviate food insecurity in Nigeria, with sales set to launch in Lagos, Kano, and Borno states, a director at the Federal Ministry of Agriculture and Food Security stated on Monday.

Early in September, the Minister of Agriculture and Food Security, Abubakar Kyari, announced the launch of the N40,000 per 50kg subsidised rice in Abuja, stating that the initiative was part of a broader strategy to ensure that no Nigerian goes to bed hungry.

He said the subsidised rice programme aims to provide relief to citizens amid soaring market prices. The current market price of a 50kg bag of rice is about N90,000. It is close to N100,000 in some other locations.

The Federal Government is providing 30,000 metric tonnes of rice through the subsidised rice programme. This translates to approximately 1,000 trucks, each carrying 600 bags.

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As I speak with you now, we are going to activate Lagos and Kano states for the sales any moment from now. Borno State is also going to be addressed,” the agriculture ministry official, who spoke to our correspondent in confidence due to lack of authorisation to speak on the matter, stated on Monday.

Reacting to the recent claim that the rice sales in the Federal Capital Territory had been halted, the official said, “We have not even gone anywhere; how can we stop? The sales are ongoing, and we are actively engaging with other states.”

Another official at the ministry said civil servants in Abuja, particularly around the federal ministries have been benefiting from the sales of the subsidised rice.

The official, however, stated that there had been challenges with coordination and public cooperation at the National Agricultural Insurance Corporation centre where the rice was being sold.

“We opened the NAIC centre to see the cooperation of the public, but they proved very difficult to control,” the official explained.

The source added that individuals blocked entry and refused to follow sales protocols, complicating the process.

Some persons came to sabotage the process to buy and take to the market, which frustrates the essence of the rice subsidy,” the official added.

Despite these challenges, the official remained optimistic about the programme’s impact, stating, “We are focused on ensuring that low-income earners, who are the direct beneficiaries, can access this vital resource.

“The government is committed to a smooth rollout in the aforementioned states, aiming to activate sales any moment from now.”

The source said the expansion is part of the government’s ongoing efforts to tackle food scarcity and support vulnerable populations nationwide, ensuring that essential staples are accessible and affordable for all Nigerians.

Nigerians have been grappling with increased hunger as food prices have skyrocketed, compounded by the naira’s declining strength, which affects citizens’ purchasing power.

According to the National Bureau of Statistics, the food inflation rate in August 2024 was 37.52 per cent year-on-year, up 8.18 percentage points from August 2023’s rate of 29.34 per cent.

Additionally, FMDQ Securities Exchange Limited reported on September 27, 2024, that the NAFEM closing rate was N1540.78/$, while it sold for over N1700/$ in some black markets in Abuja.

Meanwhile, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, speaking at a press conference in Abuja to mark the country’s 64th Independence Day, declared that the era of heavy food importation must end, positioning this shift as a cornerstone of the government’s economic recovery plan.

“We should not be importing food,” Edun stated, emphasising that Nigeria’s future lies in self-sufficiency. “It is critical that we do not disrupt domestic food production. We mustn’t flood the market with imports,” he warned.

The National Bureau of Statistics has stated that Nigeria recorded a reduction in petrol importation following the removal of fuel subsidy by President Bola Tinubu in May 2023.

It also said the total of fuel imports reduced to 20.30 billion litres in 2023 from the 23.54 billion litres recorded in 2022, showing a decrease of 13.77 per cent year-on-year.

It disclosed this in the latest petroleum products distribution statistics released by the agency on Tuesday, as it noted that petrol imports dropped by 3.58 billion litres in the second half of 2023 compared to the year’s first half.

It said the country imported 8.36 billion litres of Premium Motor Spirit (petrol) in H2 (first half) of 2023, a significant decrease from the 11.94 billion litres imported in H1 2023, marking a 29.99 per cent reduction.

It said, “In 2023, PMS truck out stood at 20.22 billion litres, indicating a 16.96 per cent decrease relative to 24.35 billion litres recorded in 2022.

“In terms of imported products, 20.30 billion litres of Premium Motor Spirit were imported in 2023 relative to 23.54 billion litres in 2022, showing a decrease of 13.77 per cent. This downward trend is even more notable when compared to H2 2022.

“In the latter half of 2022, petrol imports stood at 11.98 billion litres, resulting in a 30.22 per cent drop when compared to H2 2023, equivalent to a reduction of 3.62 billion litres.”


A breakdown for the monthly volume of fuel imports in 2023 showed that 2.09 billion was brought in January, reduced to 1.99 billion in February, increased to 2.29 billion in March, 1.91 billion in April, and 2.01 billion in May.

It was 1.64 billion in June, 1.45 billion in July, 1.09 billion in August, 1.21 billion in September, 1.16 billion in October, 1.55 billion in November and 1.88 billion in December.

These figures highlight the impact of the subsidy removal on the volume of petrol imported into the country.

Similarly, the bureau stated that the volume of Automotive Gas Oil, also known as diesel imported into Nigeria, rose to 4.94 billion litres in 2023 from four billion litres in 2022.

The statistics also showed that 109.39 million litres of AGO was locally produced in 2023, representing a 6.76 per cent rise from 102.47 million litres produced in 2022.

“About 69.71 million litres of Household Kerosene were locally produced in 2023 compared to 44.68 million litres in 2022, indicating a growth rate of 56.02 per cent over the period.

“For Automotive Gas Oil, 109.39 million litres were locally produced in 2023, when compared to 102.47 million litres reported in 2022. This represents a 6.76 per cent growth rate.


“Also, 4.94 billion litres of Automotive Gas Oil were imported in 2023, indicating an increase of 23.66 per cent compared to four billion litres in the previous year,” It added.

Upon assumption of office on May 29, President Tinubu during his inauguration speech announced a total removal of subsidy on petrol price.

Shortly after, fuel prices soared across Nigeria, with some stations selling PMS at prices as high as N700 per litre.

According to the 2023 full-year foreign trade data, Nigeria’s spending on fuel import decreased by approximately 2.6 per cent, from N7.7tn in 2022 to N7.5tn in 2023.

In terms of semi-annual comparison, the country incurred N3.5tn in fuel importation costs in the second half of 2023, representing a 10.26 per cent decrease compared to the N3.9tn recorded in the first half of the year.

Also, in the first six months of 2024, the country’s petrol import bill stood at N5.8tn.

When compared to the same period of 2023, the country’s petrol import bill increased by 87.09 per cent from N3.1tn.


The significant increase in petrol imports can be attributed to high crude oil prices coupled with a weakened naira.

The Minister of Information, Idris Mohammed, earlier said that Nigeria’s domestic consumption dropped by 50 per cent from two billion litres following the removal of fuel subsidy.

Mohammed said that the decline in importation suggests that these imports are being redirected to destinations other than Nigeria.

The subsidy removal has sparked significant controversy. While the government argues that it was necessary to allocate resources to essential sectors like healthcare, education, and infrastructure, economists contend that it unfairly impacts lower-income Nigerians.

Many have voiced concerns over the sharp increase in living costs due to rising fuel prices.

Additionally, there is ongoing debate about whether the subsidy has truly been abolished, as reports indicate that the Nigerian National Petroleum Company Limited may still be incurring costs related to fuel imports.

The situation escalated when it was revealed that the NNPC sought financial assistance from the federal government for fuel import costs, despite the subsidy removal.


This has raised doubts about the transparency of the government’s subsidy policy and the effectiveness of its implementation.

The landing cost of petrol has dropped from the N981/litre recorded on September 25, 2024, to N945.63/litre as of September 27.

This is according to data released by the Major Energies Marketers Association of Nigeria on Monday.

The drop in the landing cost of petrol happened following the appreciation of the naira against the United States dollar.

In the MEMAN report, a dollar was said to have been exchanged for N1,586.26 on September 27 while it was N1,667.22 on September 25.


Also, Brent, the global benchmark for crude, dropped from the $73.67/barrel recorded in the last report released by MEMAN to $72.45 in the latest report on Monday.

The fall must have also contributed to the reduction in the landing cost of imported petrol.

The average ex-depot prices of PMS saw a marginal reduction in Lagos, Calabar, and Port Harcourt.

The major marketers disclosed that the landing cost of diesel, which was N1,089/litre previously, dropped to N1,068.04/litre, while that aviation fuel also fell from N1,117.34/litre to N1,079.79/litre.

It was observed that the difference between imported petrol and that of Dangote might be less than N46 if calculated by the N898/litre which the Nigerian National Petroleum Company claimed it bought the Dangote fuel.

Recall that NNPC hiked the pump prices of petrol the same day the Dangote refinery unveiled its locally-produced petrol.

NNPC said it would sell the petrol lifted from the Dangote refinery at a price above N1,000/litre in the far north.

The NNPC spokesperson, Olufemi Soneye, explained that the price may go for as high as N1,019/litre in places like Borno State, and N999.22 in Abuja, Sokoto, Kano, and others.

In Oyo, Rivers, and other areas in the South, it would be N960/litre. The lowest price, according to an infographic released by the NNPC, was N950 in Lagos and its environs.


However, it was observed that while the price of petrol was as high as N1,200 or more in some parts of Nigeria, some major marketers still sold a litre at N870 in Lagos.

During a media chat with senior media practitioners recently, the Executive Vice President, Downstream at the NNPC, Dapo Segun, explained that despite reaching an agreement with the management of the Dangote refinery, the issue of pricing remained market-driven.

Segun gave an insight into the discussions between the NNPC and Mr Aliko Dangote.

“Dangote said to us, ‘This is how much I want for it (PMS)’. And we say, ‘Hey, Dangote, if we go out there, we can get it for this much, so we won’t pay you this much for it‘. And we went into the negotiation. And that negotiation took us over a week to complete. They (Dangote officials) will come with their position, we’ll come with a counter; they’ll come with a revised position, and we’ll counter it.

“At the end of the day, we were able to reach an agreement on what to be the price to pay for it,” Segun said, emphasising a statement by Soneye that the company would lift Dangote PMS only if it was cheaper than imported one.

Meanwhile, the sale of petrol to NNPC continues at the Dangote refinery as Nigerians are hopeful that the price of the commodity will crash when the naira crude sale begins today (October 1, 2024).