Despite its conversion into a commercial entity, the Nigerian National Petroleum Company Limited (NNPC) is facing growing financial strain as weak and underperforming subsidiaries continue to accumulate inter-company debt, pushing total obligations owed to the parent company to N30.30tn.
An examination of NNPC’s 2024 audited financial statements shows that debts owed by subsidiaries, joint ventures and related entities jumped by 70.4 per cent, or N12.52tn, from N17.78tn in 2023 to N30.30tn as of December 31, 2024. The sharp rise has renewed concerns over the company’s liquidity management and long-term financial health.
Further analysis of the audited accounts revealed that much of the rising receivables came from core operating units, notably the refineries, trading arms and gas infrastructure subsidiaries. Of NNPC’s 32 subsidiaries, only eight were free of inter-company debt, leaving the majority reliant on financial support from the parent company.
The development comes amid ongoing concerns over the write-off of large debts owed by NNPC to the Federation Account and the company’s plans to divest non-core assets as part of its transformation into a profit-driven national oil company. Recently, President Bola Tinubu approved the cancellation of about $1.42bn and N5.57tn in legacy debts owed by NNPC to the Federation after a reconciliation exercise.
Announcing the company’s 2024 results, Group Chief Executive Officer, Bashir Bayo Ojulari, said NNPC posted a Profit After Tax of N5.4tn on revenue of N45.1tn, representing increases of 64 per cent and 88 per cent respectively compared with 2023. However, analysts note that the swelling inter-company debt highlights underlying liquidity and balance-sheet challenges that could undermine sustainability if not addressed.
The Port Harcourt Refining Company Limited topped the list of indebted subsidiaries, with obligations rising to N4.22tn in 2024 from N2.00tn in 2023, reflecting years of rehabilitation spending and prolonged downtime. Kaduna Refining and Petrochemical Company Limited followed with N2.39tn, up from N1.36tn, while Warri Refining and Petrochemical Company Limited owed N2.06tn, compared with N1.17tn a year earlier.
Although these refineries have undergone multiple turnaround maintenance programmes, they have yet to operate sustainably at commercially viable levels and remain heavily dependent on funding from the parent company.
NNPC Trading SA also featured prominently, owing N19.15tn in 2024, more than double the N8.57tn recorded in the previous year. Other subsidiaries with notable receivables included NNPC Gas Infrastructure Company Limited, Nigerian Pipelines and Storage Company Limited, and several power, shipping and marketing entities.
Overall, amounts owed by related parties climbed from N17.78tn in 2023 to N30.30tn in 2024, underscoring mounting liquidity pressure within the group. At the same time, NNPC’s obligations to subsidiaries and related entities also rose by 44.7 per cent to N20.51tn, largely driven by amounts owed to NNPC Trading Limited.
Experts say the surge in inter-company balances reflects unresolved structural and governance challenges stemming from NNPC’s transition under the Petroleum Industry Act. Petroleum economist Prof. Wumi Iledare described the N30.3tn debt as a governance issue rather than insolvency, warning that the pace of accumulation signals weakening commercial discipline.
Similarly, Petroleumprice.ng CEO, Jeremiah Olatide, said the 70 per cent increase points to financial recklessness, noting that most subsidiaries remain indebted. He stressed the need for stronger debt management, restructuring, regular audits and transparency to prevent the recycling of debts within the group.
Meanwhile, NNPC’s borrowings more than doubled in 2024, rising from N55.7bn to N122.8bn, driven by new loans and accrued interest, mainly to fund projects such as the Gwagwalada Independent Power Project. While the consolidated group reported no borrowings, the growing company-level liabilities add to concerns about internal cash management and the financial viability of some subsidiaries.
Analysts warn that resolving inter-company receivables and payables will be critical if NNPC is to successfully execute its divestment plans, attract investors and sustain profitability under its new commercial mandate.
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