NNPC faces mounting strain as subsidiary debts swell to ₦30.3 trillion
Nigeria’s state oil firm, the Nigerian National Petroleum Company Limited (NNPC), is under intensifying financial strain as debts owed by its subsidiaries climbed sharply to ₦30.30 trillion by the end of 2024.
According to the company’s audited financial statements for 2024, inter-company receivables rose by 70.4 per cent within a year, increasing by ₦12.52 trillion from ₦17.78 trillion in 2023 to ₦30.30 trillion as of December 31, 2024. The surge reflects growing liabilities across NNPC’s refineries, trading arms and gas infrastructure businesses.
A breakdown of the accounts shows that out of NNPC’s 32 subsidiaries, only eight had no outstanding obligations to the parent company during the period. Most of the remaining units posted higher debt balances, pointing to persistent financial challenges despite ongoing reforms designed to reposition NNPC as a commercially oriented, profit-driven entity.
The rising intra-group debts come amid continued controversy surrounding the write-off of large sums owed by NNPC to the Federation Account, as well as the company’s plans to sell off non-core assets. Last week, President Bola Tinubu approved the cancellation of a significant portion of NNPC’s liabilities to the Federation, following a reconciliation exercise. The approved write-off amounted to about $1.42 billion and ₦5.57 trillion.
Despite these concerns, NNPC reported strong headline performance for 2024. Group Chief Executive Officer, Bashir Bayo Ojulari, announced that the company recorded a profit after tax of ₦5.4 trillion on revenue of ₦45.1 trillion. This represents year-on-year growth of 64 per cent in profit and 88 per cent in revenue. However, analysts caution that the rapid build-up of inter-company debts exposes underlying structural weaknesses behind the impressive top-line figures.
NNPC’s refining subsidiaries account for the largest share of the outstanding debts. Port Harcourt Refining Company Limited owed ₦4.22 trillion as of 2024, more than double the ₦2.00 trillion recorded a year earlier. Kaduna Refining and Petrochemical Company Limited posted debts of ₦2.39 trillion, while Warri Refining and Petrochemical Company Limited owed ₦2.06 trillion.
The refineries have undergone multiple rehabilitation efforts over the years, yet they continue to operate below commercially sustainable levels, contributing significantly to the growing financial burden within the NNPC group.
