Gazelle refinancing frees crude, extends Nigeria’s repayment schedule

Nigeria's $3.3 billion Project Gazelle oil-backed financing arrangement has been refinanced, a move expected to extend its repayment timeline by approximately six months, shifting the completion from December 2029 to around June 2030. This adjustment follows a reduction in the daily crude oil allocation committed to servicing the debt, from 90,000 barrels per day to 78,750 barrels per day.

The refinancing was approved by the National Economic Council, chaired by Vice President Kashim Shettima. The Federal Government sought this restructuring to alleviate pressure on crude oil allocations while ensuring debt obligations are met. The revised terms are considered more favorable than the original facility, aiming to improve Nigeria's fiscal flexibility and increase crude availability for domestic use and export.

However, the arrangement faces criticism. Kelvin Emmanuel, Managing Partner of The Energy Consulting Practice, described the proposed Project Gazelle II as unnecessary, opaque, and financially disadvantageous to Nigeria. He questioned the transparency of the transaction and argued that the structure imposes fresh costs despite existing oil-backed repayment mechanisms.

This refinancing follows an August 2023 announcement where the NNPC secured a $3 billion emergency loan from Afreximbank to repay crude oil obligations and stabilize Nigeria's exchange rate. Under that initial deal, NNPC committed 90,000 barrels of crude oil daily from Production Sharing Contract assets, with repayment beginning in June 2024. The current refinancing allows the Nigerian National Petroleum Company Limited to restructure the outstanding balance of approximately $1.5 billion from the 2023 facility and unlock an additional $3 billion in liquidity.

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The structure would impose fresh costs on the country despite existing oil-backed repayment mechanisms and questioned the transparency surrounding the transaction.