Stakeholders have urged the federal government to review the current practice of borrowing against future crude oil production, warning that the arrangement could leave part of the country’s future oil output committed to lenders before the crude can generate revenue for Nigerians or support domestic economic needs.
LEADERSHIP checks indicated that Nigeria committed about 340 million barrels of future crude oil production through 2030 to repay three oil-backed loans valued at N11.2 trillion.
LEADERSHIP’s analysis of the Nigerian National Petroleum Company Limited’s (NNPCL) 2024 and 2025 annual financial reports showed that about 186,250 barrels of crude oil per day – roughly 11 per cent of Nigeria’s current production – are being used to repay three oil-backed loans: Project Gazelle, Project Leopard and Project Leopard II.
Over the five-year life of the three arrangements, the volume amounts to about 340 million barrels, while the total value of the loans is estimated at N11.2 trillion.
Under each arrangement, a lender provides NNPC with funds upfront, while NNPC repays the facility over time with crude oil, together with interest.
Project Gazelle, signed in December 2023, commits 90,000 barrels per day from Production Sharing Contract assets. Project Leopard, signed in December 2024, covers 35,000 barrels per day, while Project Leopard II, signed in December 2025, covers 61,250 barrels per day.
The two Leopard projects therefore account for 96,250 barrels per day, in addition to the 90,000 barrels per day committed under Gazelle.
Further analysis of the contract terms showed how the 340 million barrels are distributed among the three deals.
Project Gazelle is the largest. At 90,000 barrels per day, it commits about 33 million barrels a year and 164.25 million barrels over its five-year term, accounting for nearly half of the total.
Project Leopard is the smallest. At 35,000 barrels per day, it commits about 13 million barrels a year and 63.88 million barrels over its term, representing about 19 per cent of the total.
Project Leopard II, the newest, sits in between. At 61,250 barrels per day, it commits about 22 million barrels a year and 111.78 million barrels over its term, accounting for about a third of the total. It is already larger than Leopard and will run the longest.
Together, the three deals commit about 68 million barrels every year and 339.91 million barrels over their combined terms.
Counting five years from each deal’s signing, LEADERSHIP analysis showed that about 204.8 million barrels remain to be delivered. Of this, about 71.2 million barrels belong to Gazelle, 40.5 million to Leopard and 93.2 million to Leopard II.
Leopard II therefore accounts for the largest share of the barrels still outstanding, meaning that Nigeria’s crude will remain pledged to the facility for the longest period.
Repayment on Project Leopard began in June 2025, following a six-month moratorium, while repayment on Project Leopard II began in June 2026, also after a six-month pause.
Based on the five-year terms stated for the facilities, LEADERSHIP estimated that the arrangements could run until about 2028 for Gazelle, 2029 for Leopard and 2030 for Leopard II.
The 340 million barrels represent more than 60 per cent of Nigeria’s total crude production in 2025, which the regulator put at 554.4 million barrels.
About 205 million barrels were still outstanding at the end of 2025, while NNPC’s accounts showed that approximately N8.3 trillion remained unpaid across the three facilities.
Other oil-backed arrangements also extend over several years. Project Bison, which financed NNPC’s investment in the Dangote Refinery, committed 35,000 barrels of crude per day.
Reacting to the arrangements, the Associate Professor of Management Communication and Director of the Public Sector Initiative at Lagos Business School, Prof. Silk Ogbu, said the policy raised concerns because of its uncertainty and the risk of abuse.
Ogbu told LEADERSHIP that borrowing against crude oil was economically questionable because, in his view, selling crude in this manner did not create sufficient additional value for the country.
He called for greater transparency around the agreements.
Also, the National President of the Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, said the country could lose if crude prices rose significantly above the repayment rate agreed under the facilities.
He warned that Nigeria could bear the cost of the price difference by delivering crude at a value lower than what it might have earned from selling the commodity at prevailing market prices.
On his part, the Vice Chairman of Highcap Securities Limited, David Adnori, described the use of crude oil as collateral for loans as an unconventional and, in difficult financial circumstances, potentially desperate way of raising funds.
However, he said the arrangement could help an economy manage a financial crisis, depending on how the facility was structured and implemented.
Adnori said the main risk was the opportunity cost that could arise when crude prices increased above the repayment rate. In such a situation, the country could lose the opportunity to sell the crude at the higher prevailing price.
“Conversely, if crude oil prices fall below the agreed loan repayment threshold, the borrower could benefit financially from the arrangement, paying back less than what the oil is worth,” he said.
He added that the outcome could also be affected by external factors, including OPEC production quotas. Restrictions on production could reduce the amount of crude available for delivery and affect the country’s ability to meet its obligations.
He therefore called for careful planning when securing loans backed by future crude production.
NNPC’s Explanation
Speaking in Abuja on Tuesday, September 29, during a presentation on NNPC’s 2025 audited results, the Group Chief Executive Officer, Bashir Bayo Ojulari, said Project Gazelle remained active until its obligations were fully settled.
“Specifically, Project Gazelle is still on,” Ojulari said.
He explained that the arrangement involved the federal government’s Production Sharing Contract assets and did not relate directly to NNPC’s joint-venture operations.
According to him, the distinction was important because Gazelle did not affect NNPC’s “bottom-line crude projection” in the same way as some other production arrangements.
Ojulari said the facility would remain in place until it was fully repaid, although the repayment period could change depending on crude prices and production levels.
“If your price is low and your production is low, it may be extended a little bit,” he said.
This means that a fall in crude prices or production would not remove the obligation but could lengthen the period over which the financing remained outstanding.
The Ministry of Finance has maintained that the financing models are intended to improve external liquidity and support macroeconomic stability.
SOURCE: Leadership