The Nigerian National Petroleum Company Limited (NNPCL) is facing rising financial pressure as debts owed by its subsidiaries and related entities climbed sharply to ₦30.30 trillion at the end of 2024, according to its latest audited financial statements.
Figures from the 2024 audited accounts show that inter-company receivables rose by 70.4%, or ₦12.52 trillion, from ₦17.78 trillion in 2023 to ₦30.30 trillion as of December 31, 2024. The increase reflects mounting obligations across refineries, trading units, gas infrastructure companies, and power assets within the NNPCL group.
An analysis of the accounts shows that NNPCL operates 32 subsidiaries, but only eight were not indebted to the parent company during the period. Most subsidiaries recorded higher balances year-on-year, underscoring persistent liquidity and structural challenges despite reforms under the Petroleum Industry Act (PIA).
The development comes as NNPCL continues to manage concerns around the write-off of legacy debts owed to the Federation Account and advances plans to divest non-core assets as part of its commercial transformation.
Last week, President Bola Tinubu approved the cancellation of a substantial portion of NNPCL’s obligations to the Federation, amounting to about $1.42 billion and ₦5.57 trillion, following a reconciliation of records between both parties.
Announcing the company’s 2024 financial results, Group Chief Executive Officer, Bashir Bayo Ojulari, said NNPCL posted a profit after tax of ₦5.4 trillion on revenue of ₦45.1 trillion, representing increases of 64% and 88%, respectively, over 2023. Analysts, however, say the surge in inter-company debts highlights balance-sheet pressures beneath the strong headline numbers.
Refinery and Trading Subsidiaries Drive Exposure
The largest debtors within the group were NNPCL’s refining subsidiaries.
- Port Harcourt Refining Company Limited owed ₦4.22 trillion in 2024, up from ₦2.00 trillion in 2023.
- Kaduna Refining and Petrochemical Company Limited recorded obligations of ₦2.39 trillion, compared with ₦1.36 trillion a year earlier.
- Warri Refining and Petrochemical Company Limited owed ₦2.06 trillion, up from ₦1.17 trillion.
Despite multiple turnaround maintenance programmes aimed at restoring domestic refining capacity, the refineries have yet to operate sustainably at commercially viable levels. As a result, they remain heavily dependent on financial support from the parent company.
NNPCL’s trading operations also accounted for a significant share of the exposure. NNPC Trading SA owed the parent company ₦19.15 trillion in 2024, more than double the ₦8.57 trillion recorded in 2023.
Other notable receivables included:
- NNPC Gas Infrastructure Company Limited – ₦847.98bn
- Nigerian Pipelines and Storage Company Limited – ₦466.74bn
- Gwagwalada Power Limited – ₦326.58bn
- Petroleum Products Marketing Company Limited – ₦264.75bn
- Maiduguri Emergency Power Plant – ₦179.33bn
- NNPC Medical Services Limited – ₦106.75bn
- NNPC Shipping and Logistics Limited – ₦99.99bn
- NNPC Gas Marketing Company Limited – ₦54.71bn
- NNPC Engineering and Technical Company Limited – ₦50.86bn
Smaller balances were recorded across logistics, telecoms, shipping, LNG, property, power, and new-energy subsidiaries.
Payables and Borrowings Also Rise
At the same time, NNPCL’s own obligations to subsidiaries and related entities increased to ₦20.51 trillion in 2024 from ₦14.17 trillion in 2023, representing a 44.7% year-on-year rise.
The largest portion related to NNPC Trading Limited, which was owed ₦16.36 trillion, up sharply from ₦6.70 trillion a year earlier. NNPC Exploration and Production Limited owed ₦4.02 trillion, slightly lower than ₦4.85 trillion in 2023.
Borrowings also rose significantly. NNPCL’s loans more than doubled to ₦122.8 billion in 2024 from ₦55.7 billion in 2023. The increase reflected new loan arrangements, accrued interest, and exchange adjustments, largely linked to funding for projects such as the Gwagwalada Independent Power Project.
The audited report showed that ₦70.56 billion of the loans were classified as current borrowings, while ₦52.20 billion were non-current. Loan facilities were extended by NNPC Exploration and Production Limited and The Wheel Insurance Company, with interest tied to 30-day Term SOFR plus a 4% margin.
The company noted that the consolidated group reported no borrowings in both 2023 and 2024, indicating that the liabilities sit at the company level rather than across subsidiaries or joint ventures.
Pressure Builds as Asset Sales Loom
The swelling inter-company balances come as NNPCL accelerates plans to divest stakes in refineries, pipelines, power plants, and other infrastructure assets to improve liquidity and attract external capital.
Energy economists say resolving inter-company receivables and payables will be critical if NNPCL is to execute its asset-sale plans, reassure investors, and complete its transition into a commercially viable national oil company under the PIA.
While the company continues to post strong revenue and profit figures, the scale and pace of debt accumulation within its group structure underline the depth of financial restructuring still required.