NNPC subsidiary debt rose to N30.3tn in 2024, raising concerns over liquidity, governance and long-term sustainability despite strong profits
The Nigerian National Petroleum Company Limited has come under renewed financial pressure as NNPC subsidiary debt climbed to N30.30tn in 2024, driven by mounting obligations from underperforming and unviable subsidiaries.
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Audited financial statements for the year ended December 31, 2024, show that debts owed by subsidiaries, joint ventures and related entities rose by 70.4 per cent, increasing by N12.52tn from N17.78tn in 2023.
The sharp rise has raised fresh concerns about liquidity management and the long-term sustainability of the national oil company, despite its transition into a commercial entity.
An analysis of the audited accounts released by NNPC revealed that only eight of its 32 subsidiaries were debt-free, leaving the majority with significant inter-company obligations.
The bulk of the receivables came from the company’s refineries, trading operations and gas infrastructure units.
The Port Harcourt Refining Company Limited topped the list, owing N4.22tn, up from N2.00tn a year earlier.
The Kaduna Refining and Petrochemical Company Limited followed with N2.39tn, while the Warri Refining and Petrochemical Company Limited owed N2.06tn.
Despite multiple turnaround maintenance programmes, the three refineries have yet to operate at commercially sustainable levels.
NNPC Trading SA recorded the largest single exposure, with debts of N19.15tn, more than double the N8.57tn reported in 2023.
Other subsidiaries with notable obligations included NNPC Gas Infrastructure Company Limited, Nigerian Pipelines and Storage Company Limited and the Maiduguri Emergency Power Plant.
The swelling inter-company balances come as NNPC navigates the aftermath of debt write-offs to the Federation Account and pursues asset divestments.
Last week, President Bola Tinubu approved the cancellation of about $1.42bn and N5.57tn in legacy debts owed by NNPC to the Federation following reconciliation.
Announcing the 2024 results, Group Chief Executive Officer Bashir Bayo Ojulari said the company recorded a Profit After Tax of N5.4tn on revenue of N45.1tn, representing strong year-on-year growth.
However, analysts warn that the rising subsidiary debts undermine the company’s balance sheet strength.
NNPC’s obligations to its own subsidiaries also increased to N20.51tn from N14.17tn in 2023.
Most of this exposure was owed to NNPC Trading Limited, which was due N16.36tn as of December 2024.
Petroleum economist Prof Wumi Iledare described the N30.3tn debt figure as a governance test rather than a sign of insolvency.
He warned that the pace of debt accumulation reflects weak commercial discipline across the group.
“The real fix is not debt forgiveness,” Iledare said, calling for strict settlement timelines and accountability for subsidiary management.
Similarly, Jeremiah Olatide, Chief Executive Officer of Petroleumprice.ng, described the 70 per cent increase as alarming.
He said urgent debt restructuring and transparent reporting were critical to preventing long-term damage.
NNPC’s borrowings also more than doubled to N122.8bn in 2024, largely to fund strategic projects such as the Gwagwalada Independent Power Project.
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Energy experts say resolving inter-company debts will be crucial if NNPC is to attract investors and complete its transformation into a profitable, PIA-compliant national oil company.
