…NNPCL must enforce strict settlement timelines, restructure non-viable entities and hold subsidiary management accountable,”
ABUJA, NIGERIA- The iNews Times | Despite its transition into a commercially driven entity, the Nigerian National Petroleum Company Limited (NNPCL) is facing growing financial strain as weak and underperforming subsidiaries continue to accumulate inter-company debts, pushing total obligations owed to the parent company to ₦30.30 trillion.
Data from NNPCL’s 2024 audited financial statements show that debts owed by subsidiaries, joint ventures and related entities surged by 70.4 per cent, or ₦12.52 trillion, from ₦17.78 trillion in 2023 to ₦30.30 trillion as of December 31, 2024. The sharp rise has intensified concerns over the company’s liquidity management and long-term financial stability.
An analysis of the audited accounts revealed that most of the rising receivables came from NNPCL’s core operating subsidiaries, notably its refineries, trading units and gas infrastructure companies. Of the company’s 32 subsidiaries, only eight were debt-free as of the end of 2024.
The development comes amid lingering concerns over the write-off of legacy debts owed to the Federation Account and NNPCL’s ongoing plans to divest non-core assets as part of its commercial transformation.
Last week, The it was reported that President Bola Tinubu approved the cancellation of a substantial portion of NNPCL’s debts to the Federation Account, amounting to about $1.42bn and ₦5.57tn following reconciliation of records. The company has also initiated moves to sell stakes in selected oil and gas assets.
Announcing the 2024 financial results, Group Chief Executive Officer, Bashir Bayo Ojulari, said NNPCL posted a profit after tax of ₦5.4tn on revenue of ₦45.1tn, representing increases of 64 per cent and 88 per cent respectively compared to 2023.
However, analysts note that the surge in inter-company debts to ₦30.30tn highlights the need for a review of the company’s liquidity strategy and balance-sheet management if profitability is to be sustained.
The Port Harcourt Refining Company Limited topped the list of debtors, owing ₦4.22tn in 2024, up from ₦2.00tn in 2023, reflecting prolonged rehabilitation costs and extended downtime. Kaduna Refining and Petrochemical Company Limited followed with ₦2.39tn, up from ₦1.36tn, while Warri Refining and Petrochemical Company Limited owed ₦2.06tn, compared to ₦1.17tn the previous year.
Despite multiple turnaround maintenance programmes, the three refineries have yet to achieve commercially viable operations and remain heavily reliant on financial support from the parent company.
NNPCL’s trading arm, NNPC Trading SA, recorded the largest single exposure, owing ₦19.15tn in 2024, more than double the ₦8.57tn recorded in 2023.
Other notable receivables included NNPC Gas Infrastructure Company Limited (₦847.98bn), Nigerian Pipelines and Storage Company Limited (₦466.74bn), Maiduguri Emergency Power Plant (₦179.33bn), and several other subsidiaries with outstanding balances ranging from millions to hundreds of billions of naira.
Overall, amounts owed to NNPCL by related parties rose from ₦17.78tn in 2023 to ₦30.30tn in 2024, underscoring deepening liquidity pressures within the group.
Conversely, NNPCL’s own obligations to subsidiaries and related entities also climbed, increasing by 44.7 per cent to ₦20.51tn in 2024 from ₦14.17tn a year earlier. The bulk of this exposure related to NNPC Trading Limited, which was owed ₦16.36tn, up from ₦6.70tn in 2023.
The growing inter-company balances reflect lingering financial complexities stemming from NNPCL’s transition from a state-owned corporation to a limited liability company under the Petroleum Industry Act.
Industry experts warn that resolving these receivables and payables will be critical to executing planned asset sales and restoring investor confidence.
Petroleum economist Prof. Wumi Iledare said the ₦30.3tn inter-company debt points to structural and governance weaknesses rather than insolvency, noting that only eight of 32 subsidiaries were debt-free.
“This is not bad luck; it is weak commercial discipline. A 70 per cent jump in one year is a red flag. NNPCL must enforce strict settlement timelines, restructure non-viable entities and hold subsidiary management accountable,” he said.
Similarly, the Chief Executive Officer of Petroleumprice.ng, Jeremiah Olatide, described the debt surge as alarming and warned that continued recycling of internal debts could undermine future operations if not urgently addressed.
Meanwhile, NNPCL’s borrowings more than doubled in 2024, rising to ₦122.76bn from ₦55.7bn in 2023, largely driven by loans to fund strategic projects such as the Gwagwalada Independent Power Project. The increase reflects new loan facilities, accrued interest and exchange adjustments.
The growing debt profile, combined with rising inter-company obligations, has raised fresh questions about internal cash management and the financial sustainability of several units within the NNPCL group.
