NNPC’s N8.25trn Crude Commitments Raise Cash-Flow Concerns

 

The Nigerian National Petroleum Company Limited, NNPC, has committed about N8.25 trillion worth of future crude production to lenders and prepayment partners, raising concerns over the company’s future cash flow and the revenue available from oil sales.

The figure, contained in NNPC’s 2025 audited financial statements, represents the bulk of its N8.69 trillion contract liabilities at the end of last year. The forward-sale obligations increased by about 33 per cent from N6.21 trillion in 2024.

Under the arrangements, NNPC receives funding upfront and repays the financing through future crude deliveries. BusinessDay reported that three major facilities alone commit about 186,250 barrels of crude per day to repayment obligations.

The largest arrangements include Project Leopard II, under which NNPC is expected to supply 61,250 barrels daily for five years, Project Leopard, involving 35,000 barrels daily, and Project Gazelle, which commits 90,000 barrels daily from production-sharing-contract assets.

Analysts warned that while forward-sale arrangements can provide immediate liquidity, they reduce the volume of crude available to generate fresh cash in subsequent years. NNPC also faces exposure to changes in crude prices, production levels, borrowing costs and OPEC-related output restrictions.

The pressure comes as NNPC’s overall financial performance shows a decline in revenue. Its 2025 group revenue fell by N10.56 trillion, or 23.4 per cent, to N34.52 trillion from N45.08 trillion in 2024. Crude oil revenue dropped by 13.1 per cent to N25.39 trillion, while petroleum-products revenue plunged by 77.6 per cent.

NNPC, however, recorded a profit after tax of N7.18 trillion in 2025, up from N5.41 trillion the previous year. The company is also targeting higher oil production, with management aiming for two million barrels per day by 2027 and three million barrels per day by 2030.

The latest figures underline the importance of increasing production while carefully managing future crude commitments. For Nigeria, the key question is whether higher production will generate enough additional cash to meet existing obligations and still provide stronger revenue for government and investment in the oil industry.