The Nigerian National Petroleum Company Limited (NNPC Ltd) is under renewed financial scrutiny after outstanding debts owed to it by its subsidiaries and related entities rose sharply to ₦30.3 trillion in 2024, marking a 70 per cent increase within one year.
Details from the company’s audited financial statements for the 2024 financial year show that inter-company receivables climbed from ₦17.78 trillion in 2023 to ₦30.30 trillion as of December 31, 2024. The development has raised concerns about liquidity management and internal financial discipline, despite NNPC’s transition into a commercially oriented company under the Petroleum Industry Act.
An assessment of the accounts revealed that most of the national oil company’s subsidiaries remain indebted to the parent company. Out of 32 subsidiaries, only eight were reported to be free of inter-company obligations, leaving the majority with varying levels of outstanding debts.
Refining subsidiaries accounted for a large share of the liabilities.
The Port Harcourt Refining Company Limited emerged as the biggest debtor among the refineries, with obligations rising to ₦4.22 trillion in 2024 from ₦2.00 trillion the previous year. Kaduna Refining and Petrochemical Company Limited followed with ₦2.39 trillion, while Warri Refining and Petrochemical Company Limited recorded ₦2.06 trillion.
Despite repeated turnaround maintenance efforts, the refineries are yet to operate at sustainable commercial levels, making them heavily reliant on continued financial support from NNPC and contributing significantly to the rising internal debts.
NNPC’s trading operations also played a major role in the debt build-up, with NNPC Trading SA owing the parent company ₦19.15 trillion in 2024, more than double the amount recorded a year earlier.
Other subsidiaries with notable outstanding balances include NNPC Gas Infrastructure Company Limited, Nigerian Pipelines and Storage Company Limited, Gwagwalada Power Limited, Petroleum Products Marketing Company Limited, as well as several power, shipping, medical and energy-related units within the group.
While debts owed to NNPC increased sharply, the company’s own obligations to subsidiaries and related parties also rose. Payables grew to ₦20.51 trillion in 2024 from ₦14.17 trillion in 2023, largely driven by amounts owed to NNPC Trading Limited.
NNPC recorded strong headline financial results for the year, posting a profit after tax of ₦5.4 trillion on revenue of ₦45.1 trillion, according to its Group Chief Executive Officer, Bashir Bayo Ojulari.
However, analysts say the growing inter-company debts pose risks to long-term financial stability if not properly addressed.
The rising liabilities come as NNPC continues efforts to divest non-core assets, including plans to sell stakes in refineries, pipelines and power plants, in a bid to strengthen its balance sheet and attract private investment.
Petroleum economist Prof. Wumi Iledare described the ₦30.3 trillion internal debt as a governance issue rather than a sign of insolvency, warning that allowing such obligations to linger weakens accountability and ties down cash meant for investment and maintenance.
Similarly, the Chief Executive Officer of Petroleumprice.ng, Jeremiah Olatide, said the pace of debt accumulation was alarming and called for stronger debt management, regular audits and improved transparency to prevent the recycling of liabilities within the NNPC group.
The audited accounts also showed that NNPC’s borrowings more than doubled in 2024, rising to ₦122.8 billion from ₦55.7 billion in the previous year, largely to fund strategic projects such as the Gwagwalada Independent Power Project.
Analysts say resolving inter-company debts and enforcing stricter commercial discipline will be critical if NNPC is to sustain profitability and successfully reposition itself as a competitive national oil company.
