NNPC has already spent some of tomorrow's oil money. Here's how that works.

The Nigerian National Petroleum Company Limited's audited financial statements for 2025 show ₦8.25 trillion of forward-sale obligations outstanding at year-end. These are arrangements under which NNPC has already received money in exchange for oil and gas it has not yet delivered.

The figure was ₦6.21 trillion at the end of 2024. It grew by ₦2.04 trillion in a single year, an increase of about a third. (Derived.)

Forward sales now account for roughly 95% of NNPC's ₦8.689 trillion of total contract liabilities. The portion classified for nearer-term settlement rose to ₦2.86 trillion from ₦764 billion — close to four times higher. (Derived.)

In Simple Terms

NNPC has been paid in advance for crude it still has to pump.

The mechanism is ordinary in commodity markets. A producer who wants cash now agrees to deliver oil later, and a lender or trader pays upfront. The producer gets liquidity without issuing a bond. The lender gets barrels rather than naira.

The consequence is also ordinary, and it is the whole story: when those barrels are eventually lifted, they do not generate fresh money, because the money was collected years earlier and has been spent. Each delivery settles an old debt rather than funding a new budget.

The accounts do not file these arrangements under debt. They appear as contract liabilities — money received for goods still owed.

The Money

Three figures show what this financing costs.

Interest on contract liabilities: ₦847.6 billion in 2025, against ₦272 billion in 2024. That is more than three times as much, an extra ₦575.6 billion. (Derived.)

A forward term sale agreement termination fee of ₦660.7 billion, paid to exit one arrangement.

Together, roughly ₦1.5 trillion in financing and exit costs within twelve months. (Derived.) Measured against the average obligation balance across the year, the interest alone works out at roughly 12%. (Derived, and approximate — the balance grew during the period, so the true effective rate depends on timing the accounts do not disclose.)

Where the upfront money went is partly on record. NNPC has previously said Project Gazelle's proceeds funded advance payments of tax and royalty obligations to the Federation, and that sale proceeds above the amount owed can flow back under the arrangement. So this is better understood as revenue pulled forward than revenue lost.

Follow the Money

Who this reaches. Beyond what the accounts state, the tracing here is Rainingmoney's reading.

The Federation received money earlier than the production calendar would have delivered it, including advance tax and royalty payments. NNPC paid ₦11.56 trillion in royalties during 2025 against ₦2.83 trillion in 2024, clearing arrears — royalties owed fell to ₦1.27 trillion from ₦9.21 trillion. The trade-off is that some future oil income has already been consumed.

Lenders and trading partners hold claims settled in barrels rather than cash, which insulates them from naira movements. They earned ₦847.6 billion in interest in 2025.

NNPC itself gained liquidity for investment — about ₦9.46 trillion went into oil, gas and fixed assets — at a cost now visible in the interest line.

The shareholder received roughly ₦4 trillion in dividends.

Ordinary Nigerians sit at the end of this chain. Federal spending on salaries, infrastructure and subsidies depends heavily on oil receipts. Barrels committed to past financing are barrels unavailable to fund future budgets, which is why the maturity profile matters more than the headline.

The Bigger Picture

NNPC is targeting 2 million barrels a day by 2027 and 3 million by 2030. Nigeria produced about 1.505 million barrels a day in July 2026, though that national figure covers joint ventures and international producers and is not NNPC's own entitlement.

Those targets now carry a second job. Production growth is usually framed as upside. Here it is also the mechanism for working through existing commitments — new barrels are what allow old promises to be settled while still generating fresh revenue. Without growth, the two uses compete for the same crude.

The timelines reach well into the decade. Project Gazelle's deliveries run from 2024 to 2029 under a $3.3 billion facility. Project Yield expires in June 2029, and an offtake-financing arrangement in October 2029. Project Bison, reported as financing NNPC's Dangote Refinery investment through a 35,000 barrels-a-day commitment entered in 2021, was scheduled to expire in December 2026 according to earlier reporting.

Among the named commitments, Project Gazelle at 90,000 barrels a day, Project Leopard at 35,000 and Project Leopard II at 61,250 total roughly 186,250 barrels a day. (Derived.)

The Jargon

Forward sale — selling something now for delivery later, with payment taken upfront.

Contract liability — money a company has received for goods or services it still owes. It sits on the balance sheet until the goods are delivered.

Current portion — the slice of an obligation expected to be settled in the nearer term.

PSC (Production Sharing Contract) — an arrangement where a company funds development and recovers costs from the oil produced, sharing the rest with government. Project Gazelle draws on PSC assets rather than joint ventures.

Royalty — a payment to government based on the volume or value of resources extracted.

Writeback — reversing an earlier charge when a liability or loss turns out smaller than provided for. It increases reported profit without new cash coming in.

Offtake financing — a loan repaid from the proceeds of agreed future output.

What Happens Next

Known. ₦8.25 trillion was outstanding at December 2025, with ₦2.86 trillion classified as current. Interest ran at ₦847.6 billion for the year. Deliveries under named arrangements extend to 2029. Group Chief Executive Bashir Bayo Ojulari has confirmed Project Gazelle remains in place, saying "Specifically, Project Gazelle is still on."

Possible. Repayment windows may lengthen. Ojulari has said that "if your price is low and your production is low, it may be extended a little bit." Higher production could ease the squeeze if targets are met.

Unknown. The year-by-year maturity profile of the ₦8.25 trillion. Whether every disclosed arrangement remains on its originally reported schedule. How much of NNPC's own crude entitlement is uncommitted in any given year. And whether 2026 brings further forward sales or a wind-down.

Rainingmoney's Take

Analysis, not reporting.

Nothing in these accounts suggests impropriety. Forward sales are a standard instrument, the arrangements are disclosed, and the proceeds are traceable to tax payments, royalty arrears and capital spending. A company that cleared ₦9.21 trillion of royalty arrears down to ₦1.27 trillion was not hiding money.

The concern is structural rather than ethical. An obligation that must be settled in barrels behaves differently from one settled in cash: it cannot be refinanced on better terms, and it grows heavier whenever oil prices fall. The current portion quadrupling in a year, alongside cash falling ₦3.96 trillion, is the combination worth monitoring — not because either number is alarming alone, but because they move in the same direction.

The headline profit of ₦7.18 trillion deserves less weight than it will get. It rose while revenue fell ₦10.56 trillion, carried by other income of ₦8.42 trillion and a provision reversal worth over ₦1 trillion year-on-year. That describes 2025. The forward-sale line describes 2027 through 2029.

One disclosure would settle most of this. A maturity schedule showing when the ₦8.25 trillion falls due, year by year, would let analysts, legislators and citizens judge the cash-flow position directly instead of inferring it from project announcements made at different times. NNPC has the schedule. Publishing it would cost nothing and would replace speculation with arithmetic.