Despite its transition into a commercially driven entity, the Nigerian National Petroleum Company Limited (NNPC) is facing growing financial pressure as debts owed by its subsidiaries and related entities surged to N30.30tn in 2024, raising concerns about liquidity management and long-term sustainability.
According to NNPC’s audited financial statements for the year ended December 31, 2024, outstanding inter-company receivables rose by 70.4 per cent, or N12.52tn, from N17.78tn in 2023 to N30.30tn. The sharp increase has intensified scrutiny of the company’s balance sheet, particularly as it pushes ahead with reforms aimed at positioning itself as a profitable, commercially oriented national oil company.
An analysis of the audited accounts shows that several of NNPC’s core operating subsidiaries—especially its refineries, trading units and gas infrastructure companies—accounted for the bulk of the rising debts. Out of the company’s 32 subsidiaries, only eight were not indebted to the parent company as of the end of 2024.
The Port Harcourt Refining Company Limited topped the list, owing N4.22tn in inter-company debts, up from N2.00tn in 2023. The Kaduna Refining and Petrochemical Company Limited followed with N2.39tn, while the Warri Refining and Petrochemical Company Limited owed N2.06tn, reflecting continued financial strain from prolonged rehabilitation efforts and low commercial performance.
NNPC’s trading operations also contributed significantly to the debt build-up. NNPC Trading SA’s obligations more than doubled to N19.15tn in 2024 from N8.57tn a year earlier, underscoring inefficiencies within the group’s trading structure.
The growing inter-company debts come even as NNPC posted strong headline financial results. The Group Chief Executive Officer, Bashir Bayo Ojulari, announced that the company recorded a Profit After Tax of N5.4tn on revenue of N45.1tn in 2024, representing increases of 64 per cent and 88 per cent respectively over 2023 figures.
However, analysts warn that the rising internal debts could undermine these gains if left unresolved. Petroleum economist Prof Wumi Iledare described the N30.3tn inter-company debt as a governance and structural challenge rather than a sign of insolvency. He said the scale and pace of the debt growth highlight weak commercial discipline across subsidiaries.
“Only eight out of 32 subsidiaries being debt-free tells us this is not bad luck; it is weak commercial discipline,” Iledare said, urging NNPC to enforce strict settlement timelines, restructure non-viable entities and hold subsidiary management accountable.
Similarly, the Chief Executive Officer of Petroleumprice.ng, Jeremiah Olatide, described the 70 per cent increase in inter-company debts as alarming and warned that continued recycling of debts could hurt future operations.
The debt surge comes amid NNPC’s renewed push to divest non-core assets, improve liquidity and attract external investment. Experts say resolving internal receivables and payables will be critical if the company is to sustain profitability and restore investor confidence under the Petroleum Industry Act framework.
