The Nigerian National Petroleum Company Limited (NNPC Ltd) is facing severe financial challenges as debts owed by its subsidiaries and related entities ballooned 70.4 per cent to N30.30 trillion by December 31, 2024.
Okay News reports that the sharp rise—from N17.78 trillion in 2023—highlighted in the company’s 2024 audited financial statements has intensified concerns over liquidity management and long-term sustainability.
The surge stems primarily from underperforming subsidiaries, including refineries, trading arms, and gas infrastructure units, which continue to rely heavily on parent-company funding.
Of NNPC’s 32 subsidiaries, only eight are free of inter-company debt, leaving the majority burdened with escalating obligations.
This comes amid NNPC’s transition to a commercial entity under the Petroleum Industry Act, recent Federal Government cancellation of legacy debts totalling $1.42 billion and N5.57 trillion owed to the Federation Account, and plans to divest non-core assets.
Despite recording a Profit After Tax of N5.4 trillion on N45.1 trillion revenue—up 64 per cent and 88 per cent respectively—the massive inter-company receivables underscore structural vulnerabilities.
Port Harcourt Refining Company Limited topped debtors with N4.22 trillion (from N2.00 trillion), followed by Kaduna Refining and Petrochemical Company Limited (N2.39 trillion from N1.36 trillion) and Warri Refining and Petrochemical Company Limited (N2.06 trillion from N1.17 trillion).
These refineries, despite repeated turnaround maintenance, remain operationally challenged and financially dependent.
NNPC Trading SA owed a staggering N19.15 trillion, more than doubling from N8.57 trillion.
Other significant debtors included NNPC Gas Infrastructure Company Limited (N847.98 billion), Nigerian Pipelines and Storage Company Limited (N466.74 billion), and various power plants, medical, shipping, and new energy units.
Conversely, NNPC’s obligations to subsidiaries rose 44.7 per cent to N20.51 trillion, mainly to NNPC Trading Limited (N16.36 trillion).
Petroleum economist Professor Wumi Iledare described the 70 per cent increase as a “warning sign” of inefficiencies outpacing reforms, with most debt being “NNPC owing itself” through unpaid crude, products, or services.
He urged strict commercial discipline, settlement timelines, restructuring of non-viable entities, and CEO accountability.
Jeremiah Olatide, CEO of Petroleumprice.ng, labelled it “financial recklessness,” warning of operational threats without urgent debt management, audits, and transparent reporting.
NNPC’s external borrowings doubled to N122.8 billion, funding projects like the Gwagwalada Independent Power Plant.
As NNPC pursues asset sales and portfolio optimisation, resolving inter-company imbalances remains critical for financial health and investor confidence.
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