The Nigerian National Petroleum Company Limited (NNPCL) increased its outstanding crude-backed forward sale obligations to ₦7.10tn in 2025, even as it nearly tripled principal repayments and paid ₦686.94bn in interest, according to its audited financial statements for the year.
The interest payment rose by 171.4 per cent from ₦253.14bn in 2024, an increase of ₦433.80bn, reflecting the growing financing cost of arrangements through which the national oil company receives funds or other value in exchange for future crude oil supplies.
A review of the financial statements showed that NNPCL’s outstanding contract liabilities under the agreements increased by ₦2.13tn, or 42.7 per cent, from ₦4.98tn at the end of 2024 to ₦7.10tn as of December 31, 2025.
The increase occurred despite principal repayments rising by 192.7 per cent to ₦2.76tn from ₦942.08bn in the previous year.
NNPCL recorded additional drawdowns of ₦5.57tn during 2025, compared with ₦2.81tn in 2024. The amount represented a year-on-year increase of ₦2.76tn, or 98.4 per cent, leaving new drawdowns substantially above principal repayments.
The difference between the additional drawdowns and principal repayments was approximately ₦2.81tn, although other movements, including premiums, interest, transfers and currency translation adjustments, also affected the closing liabilities.
The premium attached to the contract liabilities rose to ₦666.66bn in 2025 from ₦249.38bn in 2024, an increase of ₦417.28bn, or 167.3 per cent.
While the premium represents an additional amount recognised against the liabilities, interest payments reflect the financing costs settled during the year. Both figures show a substantial increase in the costs associated with NNPCL’s crude-backed funding arrangements.
Project Leopard accounted for the largest share of the outstanding obligations at the end of 2025. The arrangement, which had no outstanding balance at the beginning of 2024, closed that year with a liability of ₦1.26tn before recording an additional ₦4.83tn in drawdowns during 2025.
After a principal repayment of ₦420.81bn, a premium of ₦340.21bn, interest payments of ₦305.49bn and a translation difference of ₦325.27bn, Project Leopard ended 2025 with an outstanding liability of ₦5.38tn.
That balance represented approximately 75.7 per cent of NNPCL’s total forward sale contract liabilities of ₦7.10tn at the end of the year.
Project Panther, another major arrangement, recorded a more modest increase. Its outstanding liability rose from ₦912.91bn in 2024 to ₦929.88bn in 2025, an increase of ₦16.97bn, or 1.9 per cent.
Other agreements recorded reductions in their outstanding balances. The NLNG SPDC arrangement declined from ₦637.88bn to ₦609.24bn, a decrease of ₦28.64bn, or 4.5 per cent.
The NLNG TEPNG liability fell more sharply, dropping from ₦435.43bn in 2024 to ₦184.82bn in 2025. The reduction of ₦250.61bn represented a decline of 57.6 per cent.
Project Yield, which had an outstanding liability of ₦1.46tn at the end of 2024, was fully extinguished by December 2025 after principal repayments of ₦1.52tn during the year.
The financial statements also recorded a ₦265.73bn transfer from DSDP and other customer-related contract liabilities to trade customers in 2025, compared with ₦211.46bn in 2024. The increase was ₦54.28bn, or 25.7 per cent.
Currency translation adjustments also changed significantly. The translation difference moved from a positive ₦1.18tn in 2024 to a negative ₦394.08bn in 2025, a deterioration of approximately ₦1.57tn.
These movements contributed to the overall increase in contract liabilities, alongside the substantial new drawdowns recorded during the year.
Forward sale agreements allow NNPCL to obtain funding or other consideration before delivering the crude oil covered by the arrangements. The transactions create obligations that remain on the company’s books until they are settled through crude deliveries, repayments, transfers or other recognised adjustments.
The rising liabilities and financing costs come as NNPCL seeks to change how it funds and manages certain oil-sector operations, including refinery rehabilitation.
The company’s Group Chief Executive Officer, Bashir Ojulari, recently said NNPCL had adopted a new payment model for refinery rehabilitation, moving away from the previous practice of paying contractors with crude oil.
Speaking at a media parley, Ojulari argued that the former arrangement allowed contractors and financing partners to receive payment without having a direct stake in the refineries’ subsequent performance.
He said NNPCL had funded the contractors, financing and associated structures, while the parties involved were not financially exposed to whether the refineries delivered the expected results.
“What we have learned from the past rehabilitations of the refineries was multiple, but I’ll remind you again of the two of them that I’ve always talked about. One was that the model we have used before meant that we would incentivise people who work on the refinery, and there was no skin in the game,” Ojulari said.
“We paid for contractors, we paid for financing, we structured and paid for everything we pay for, right? And then none of those parties that were working with us had a stake in the performance of the refinery after their work. It’s very simple. How do we pay? We pay with our crude.”
He said the company stopped using that model in 2025 and attributed part of its reported revenue for the year to the resulting reduction in financial leakages.
“Last year we stopped that. Part of the revenue you’ve seen in 2025 was part of the leakages that we stopped. It was money going in that was not bringing net positive outcomes. So by stopping that leakage last year, that revenue, both the crude and the extra money we’re spending has come into what that was pulling together to report,” he said.
NNPCL’s 2025 financial figures show that, despite the higher principal repayments, the company’s forward sale obligations continued to expand as additional drawdowns exceeded repayments. The ₦686.94bn interest bill and the ₦7.10tn closing liability highlight the scale of the financial commitments attached to its crude-backed funding arrangements.