The Nigerian National Petroleum Company Limited (NNPC) is grappling with rising financial pressures as intercompany debts from its subsidiaries, joint ventures, and related entities soared to N30.30 trillion in 2024, according to its recently released audited financial statements.
The figures reveal a 70.4 per cent increase—N12.52 trillion—over the N17.78 trillion owed in 2023, raising concerns about liquidity management and long-term financial sustainability as the national oil company continues its transition into a commercially oriented entity.
Analysis of the accounts shows that core operational subsidiaries—including refineries, trading arms, and gas infrastructure units—account for most of the ballooning debts. Of NNPC’s 32 subsidiaries, only eight are debt-free, leaving the majority heavily reliant on the parent company for financial support.
This surge comes as NNPC works on restructuring and divesting non-core assets. Last week, President Bola Tinubu approved the cancellation of a significant portion of NNPC’s obligations to the Federation Account, wiping off approximately $1.42 billion and N5.57 trillion after a reconciliation between the parties. The company has also initiated plans to sell stakes in some of its oil and gas assets.
Despite these challenges, NNPC posted strong headline figures for 2024. Group Chief Executive Officer Bashir Bayo Ojulari announced a Profit After Tax of N5.4 trillion on revenue of N45.1 trillion, representing increases of 64 per cent and 88 per cent, respectively, over the previous year. Yet, analysts say the rising intercompany debts highlight the need for robust liquidity management to sustain profitability and support planned divestments.
Among subsidiaries, the Port Harcourt Refining Company Limited recorded the highest intercompany debt at N4.22 trillion, up sharply from N2.00 trillion in 2023, reflecting prolonged operational downtime and rehabilitation costs. Kaduna Refining and Petrochemical Company Limited followed with N2.39 trillion, up from N1.36 trillion, while Warri Refining and Petrochemical Company Limited owed N2.06 trillion, rising from N1.17 trillion in 2023. Despite multiple turnaround maintenance programs, these refineries remain dependent on financial support from the parent company.
NNPC’s trading operations also contributed significantly to the debt load. NNPC Trading SA owed N19.15 trillion, more than double the N8.57 trillion recorded in 2023. Other notable receivables included:
- NNPC Gas Infrastructure Company Limited: N847.98 billion
- Nigerian Pipelines and Storage Company Limited: N466.74 billion
- Maiduguri Emergency Power Plant: N179.33 billion
- NNPC Eighteen Operating Limited: N681 million
- NNPC Trading Services (UK) Limited: N1.97 billion
- Nidas Shipping Service Agency Limited: N1.26 billion
- Kaduna IPP Limited: N1.83 billion
- Kano IPP Limited: N1.47 billion
- Hyson Nigeria Limited (Joint Venture): N102 million
Additional subsidiaries with outstanding balances include:
- Petroleum Products Marketing Company Limited: N264.75 billion
- NNPC Medical Services Limited: N106.75 billion
- NNPC Shipping and Logistics Limited: N99.99 billion
- NNPC Gas Marketing Company Limited: N54.71 billion
- NNPC Engineering and Technical Company Limited: N50.86 billion
- Gwagwalada Power Limited: N326.58 billion
- National Petroleum Telecommunication Limited: N26.37 billion
- NNPC LNG Limited: N28.22 billion
- NNPC Properties Limited: N18.94 billion
- NNPC New Energy Limited: N5.51 billion
In total, the jump from N17.78 trillion in 2023 to N30.30 trillion in 2024 underscores growing liquidity pressures within NNPC’s group structure. Analysts warn that while NNPC’s commercial transformation is progressing, addressing the surge in intercompany debts is critical to sustaining profitability, executing planned divestments, and achieving long-term financial stability.
The report also highlighted a significant rise in NNPC’s obligations to its subsidiaries and related entities, which surged to N20.51 trillion in 2024, up from N14.17 trillion in 2023. This represents a 44.7 per cent increase over the course of a single year, underscoring the growing financial entanglements within the national oil company’s group structure. Analysts note that such a sharp year-on-year jump reflects not only the expansion of intra-group transactions but also lingering challenges in the company’s transition from a state corporation to a commercially oriented limited liability entity under the Petroleum Industry Act.
The largest portion of this exposure is tied to NNPC Trading Limited, which the parent company owed N16.36 trillion as of December 2024, up from N6.70 trillion the previous year. NNPC Exploration and Production Limited accounted for N4.02 trillion, slightly lower than N4.85 trillion in 2023. Smaller amounts were recorded for NNPC Retail Limited (N10.95 billion), NNPC HMO (N3.47 billion), Antan Producing Limited (N7.20 billion), and NNPC Gas Infrastructure Company Limited (N106.97 billion).
Industry analysts attribute the rising inter-company balances to ongoing financial complexities arising from NNPCL’s transition from a state corporation to a limited liability company under the Petroleum Industry Act (PIA).
The swelling debts come as the company intensifies efforts to divest non-core assets, improve liquidity, and attract external investment. NNPCL has repeatedly signalled intentions to sell stakes in refineries, pipelines, power plants, and other infrastructure assets as part of a broader strategy to strengthen its balance sheet. In recent statements, the company confirmed it is reviewing its asset portfolio to unlock value, reduce debt exposure, and reposition itself as a commercially viable national oil company capable of competing on a global scale.
Experts warn that the resolution of inter-company receivables and payables is critical for NNPCL to successfully execute its asset-sale strategy and instill investor confidence in its financial discipline.
Petroleum economist Prof. Wumi Iledare described the N30.3 trillion debt between NNPC and its subsidiaries as a symptom of structural and governance weaknesses rather than outright insolvency. Speaking on the figures, he noted that the 70 per cent year-on-year increase in inter-company debts should raise concerns.
“Most of this debt is NNPC owing itself, arising when subsidiaries continue operations without paying for crude, products, or services, with losses quietly carried forward,” Iledare said. “But a 70 per cent jump in a single year is a clear warning sign. Only eight out of 32 subsidiaries being debt-free indicates weak commercial discipline rather than bad luck.”
Iledare stressed that the solution lies in enforcing strict commercial rules rather than writing off debts. “Even internal debt affects operations. Cash that should go into maintenance, investments, and growth is tied down. Profitable units end up subsidising weaker ones, eroding accountability and performance over time. NNPC must enforce settlement timelines, restructure or merge non-viable entities, clearly separate legacy pre-PIA debts from new obligations, and hold subsidiary CEOs accountable for cash flow and profitability,” he said.
He concluded that the rising inter-company debt burden represents a defining moment for the restructured national oil company. “Bottom line: this debt is a governance test, not just an accounting number. If tolerated, it risks recreating old NNPC problems. If addressed honestly, it could be the turning point toward a truly profitable, PIA-compliant NNPC.”
Jeremiah Olatide, CEO of Petroleumprice.ng, also expressed concern over the rapid accumulation of debt. “A 70 per cent increase in inter-company obligations from 2023 reflects financial recklessness within the group,” he said. Olatide noted that 25 out of 33 subsidiaries carrying debts could negatively impact operations if the cycle is not addressed. He also acknowledged the Federal Government’s intervention in cancelling $1.42 billion in legacy debts, which helped ease immediate financial pressure.
Olatide emphasized that a strong debt-management framework, regular audits, and transparent reporting will be crucial for NNPCL’s long-term sustainability.
In parallel, NNPC’s borrowings more than doubled in 2024, rising from N55.7 billion in 2023 to N122.8 billion. The increase, largely due to new loans and accrued interest, supports strategic projects such as the Gwagwalada Independent Power Project. New loans during the year included N44.36 billion in principal, N1.69 billion in interest, and N4.02 billion in exchange adjustments.
Of the total borrowings, N70.56 billion is classified as current, while N52.20 billion is non-current, indicating repayment obligations extending beyond 12 months. Funding for the Gwagwalada IPP came through loan facilities provided by NNPC E&P Limited and The Wheel Insurance Company, with repayment terms spanning one to four years and moratoriums on principal repayments.
While the consolidated group reported no borrowings at the subsidiary or joint-venture level, the company-level obligations highlight the challenges of managing both external loans and complex inter-company debts. With subsidiaries owing N30.3 trillion as of 2024, questions remain about internal cash management and the financial sustainability of certain units within the NNPCL group.