₦airaland Forum

Despite its transition into a commercial entity, the Nigerian National Petroleum Company Limited is grappling with mounting financial pressure as unviable and underperforming subsidiaries deepen inter-company indebtedness, pushing outstanding obligations owed to the company to N30.30tn.

Latest findings from NNPC’s 2024 audited financial statements showed that debts owed by subsidiaries, joint ventures, and other related entities rose by 70.4 per cent, or N12.52tn, from N17.78tn in 2023 to N30.30tn as of December 31, 2024. The sharp increase has raised fresh concerns about the company’s liquidity management and long-term financial sustainability.

An analysis of the audited accounts, recently released by the oil firm, conducted on Sunday, revealed that several of the national oil company’s core operating subsidiaries—particularly its refineries, trading arms, and gas infrastructure units—accounted for the bulk of the ballooning intercompany receivables.

The report showed that while the national oil company operates 32 subsidiaries, only eight are not indebted to the parent company, leaving the majority burdened with varying levels of inter-company debt.

This development comes as NNPC continues to navigate concerns surrounding the write-off of substantial debts owed to the Federation and advances plans to divest non-core assets as part of its ongoing transformation into a profitable, commercially oriented national oil company.

Last week, The PUNCH exclusively reported that President Bola Tinubu approved the cancellation of a significant portion of the debts owed by NNPC to the Federation Account, wiping off about $1.42bn and N5.57tn after a reconciliation of records between both parties.

The company has also begun moves to sell stakes in some of its oil and gas assets.

Announcing the company’s 2024 financial results, Group Chief Executive Officer, Bashir Bayo Ojulari, said NNPC recorded a Profit After Tax of N5.4tn on the back of N45.1tn in revenue for the year, representing increases of 64 per cent and 88 per cent respectively over the 2023 figures.

Despite these strong headline numbers, the surge in inter-company debts to N30.30tn underscores the need for a rethink of liquidity strategy and balance-sheet management if the company is to sustain profitability and successfully execute its planned divestments and restructuring.

Topping the list of subsidiaries owing NNPC is the Port Harcourt Refining Company Limited, which posted inter-company debts of N4.22tn in 2024, up sharply from N2.00tn in 2023. This reflects the financial strain associated with years of rehabilitation spending and prolonged operational downtime.

Next was the Kaduna Refining and Petrochemical Company Limited, whose obligations rose to N2.39tn from N1.36tn a year earlier, while the Warri Refining and Petrochemical Company Limited owed N2.06tn, up from N1.17tn in 2023.

The PUNCH reports that although the Port Harcourt, Warri, and Kaduna refineries have undergone several rounds of turnaround maintenance aimed at boosting domestic refined petroleum output, they have yet to operate sustainably at commercially viable levels.

As a result, they remain largely dependent on continued financial support from the parent company, contributing significantly to rising inter-company debts reflected in NNPC’s 2024 accounts.

NNPC’s trading operations also featured prominently, with NNPC Trading SA owing the parent company N19.15tn, more than double the N8.57tn recorded in the previous year.


Smaller but notable receivables were recorded from NNPC Gas Infrastructure Company Limited (N847.98bn), Nigerian Pipelines and Storage Company Limited (N466.74bn), Maiduguri Emergency Power Plant (N179.33bn), NNPC Eighteen Operating Limited (N681m), NNPC Trading Services (UK) Limited (N1.97bn), Nidas Shipping Service Agency Limited (N1.26bn), Kaduna IPP Limited (N1.83bn), Kano IPP Limited (N1.47bn) and Hyson Nigeria Limited (Joint Venture) (N102m).

Other subsidiaries with outstanding balances include Petroleum Products Marketing Company Limited (N264.75bn), NNPC Medical Services Limited (N106.75bn), NNPC Shipping and Logistics Limited (N99.99bn), NNPC Gas Marketing Company Limited (N54.71bn), NNPC Engineering and Technical Company Limited (N50.86bn), Gwagwalada Power Limited (N326.58bn), National Petroleum Telecommunication Limited (N26.37bn), NNPC LNG Limited (N28.22bn), NNPC Properties Limited (N18.94bn), and NNPC New Energy Limited (N5.51bn).

In total, amounts owed by related parties climbed from N17.78tn in 2023 to N30.30tn in 2024, underscoring deepening liquidity pressures within the NNPC group structure.

Conversely, the report showed that NNPC’s obligations to its subsidiaries and related entities also increased, rising to N20.51tn in 2024 from N14.17tn in 2023, representing a 44.7 per cent year-on-year increase.

The bulk of this exposure relates to NNPC Trading Limited, to which the national oil company owed N16.36tn as of December 2024, up sharply from N6.70tn a year earlier.

Similarly, NNPC Exploration and Production Limited was owed N4.02tn, down from N4.85tn in 2023, while smaller balances were recorded for NNPC Retail Limited (N10.95bn), NNPC HMO (N3.47bn), Antan Producing Limited (N7.20bn) and NNPC Gas Infrastructure Company Limited (N106.97bn).

The sharp rise in inter-company balances reflects lingering financial complexities arising from NNPCL’s transition from a state corporation to a limited liability company under the Petroleum Industry Act.

The swelling debts come amid the company’s renewed push to divest non-core assets, improve liquidity and attract external capital. NNPCL has repeatedly signalled plans to sell stakes in refineries, pipelines, power plants and other infrastructure assets to strengthen its balance sheet.

Recently, the company confirmed it was reviewing its asset portfolio to unlock value, reduce debt exposure and reposition itself as a commercially viable national oil company capable of competing globally.

Energy experts say resolving inter-company receivables and payables will be critical if NNPC is to execute its asset-sale plans successfully and reassure potential investors of its financial discipline.

Commenting, petroleum economist Prof Wumi Iledare said NNPC must begin operating as a true commercial holding company by enforcing strict settlement timelines among subsidiaries and ending the practice of allowing inter-company obligations to linger indefinitely.

He warned that the N30.3tn inter-company debts recorded in NNPC’s 2024 audited accounts point to deep-rooted structural and governance weaknesses, rather than outright insolvency.

In a personal note reacting to The PUNCH report titled “NNPC’s N30.3tn Debt, A Simple Way to See It from PEWI’s Lens,” Iledare said the scale and pace of the debt build-up should raise red flags, particularly as it represents a 70 per cent increase within a single year.

“The audited report showing N30.3tn in debts between NNPC and its subsidiaries should worry us, not because NNPC is ‘bankrupt,’ but because it exposes a deep structural problem.

“Most of this debt is NNPC owing itself. That usually happens when subsidiaries keep operating without paying for crude, products, or services, while losses are quietly carried forward. But a 70 per cent jump in one year is a clear warning sign. It means inefficiencies are growing faster than reforms.

“Only eight out of 32 subsidiaries being debt-free tells us this is not bad luck; it is weak commercial discipline,” he said.

Iledare stressed that the issue could not be dismissed as operational misfortune, noting 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 weak ones. Over time, accountability disappears, and performance suffers. The real fix is not debt forgiveness.

“NNPC must act like a true commercial holding company: enforce settlement timelines between subsidiaries, 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 added.

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 will recreate the old NNPC problems under a new name. If confronted honestly, it can become the turning point toward a truly profitable, PIA-compliant NNPC.”

Also commenting, the Chief Executive Officer of Petroleumprice.ng, Jeremiah Olatide, said the 70 per cent increase from 2023 reflects “financial recklessness” within the national oil company. “The N30.3tn debt owed by NNPCL and its subsidiaries is quite alarming,” Olatide told The PUNCH.

“A 70 per cent increase from 2023 represents financial recklessness. This debt burden could have a largely negative impact on the company’s operations, given that 25 out of 33 subsidiaries are in debt.

“If not for the intervention of the Federal Government to cancel $1.42bn in legacy debts to ease financial pressure—which is commendable—NNPCL management would be under even greater strain. However, the cycle of debt must be urgently addressed, as it will be detrimental to future operations,” he said.

Olatide added that a strong debt-management framework is essential for NNPCL’s sustainability. “Going forward, proper debt management and restructuring, combined with regular audits and transparent reporting, will enhance accountability and help mitigate the recycling of debts within the group,” he said.

Meanwhile, NNPC’s borrowings more than doubled in 2024, rising from N55.7bn in 2023 to N122.8bn, according to the company’s audited financial statements. The increase, driven largely by new loan arrangements and accrued interest, reflects efforts to fund strategic projects such as the Gwagwalada Independent Power Project.

The report showed that the company added N44.36bn in new borrowings during the year, alongside N1.69bn in interest and an exchange adjustment of N4.02bn, bringing total borrowings to N122.76bn as of December 31, 2024.

Of this amount, N70.56bn was classified as current borrowings, while N52.20bn was non-current, highlighting repayment obligations extending beyond 12 months.

According to the report, loan facilities were extended by NNPC E&P Limited and The Wheel Insurance Company to fund the Gwagwalada IPP. NNPC E&P disbursed N92bn in 2023, repayable over four years with a one-year moratorium on principal repayment, while The Wheel Insurance provided N46bn in 2024, repayable over one year with a six-month moratorium. Interest on both facilities accrues at 30-day Term SOFR plus a four per cent margin, with an additional liquidity premium applied to the NNPC E&P loan.

The report also indicated that the consolidated group reported no borrowings in both 2023 and 2024, suggesting that these liabilities are company-level obligations and do not reflect debt at the subsidiary or joint-venture level.

The surge in loans comes as NNPCL continues to manage complex inter-company debt dynamics, with subsidiaries owing the parent company N30.3tn as of 2024, raising further questions about internal cash management and the financial sustainability of certain units within the group.

Source: https://punchng.com/nnpc-subsidiaries-debt-balloons-70-to-n30tn

Lol…I no really blame atiku wey talk say he go privatize this NNPC…the corruption there is just too much

Debt or illegal subsidy payments ?

the way them dey call money these days leaves one bewildered. When there is no accountability, how do you expect citizens not to boycott paying tax? You collect our collective natural resources, still collect out sweat, all to live lavishly and for some set of people to misappropriate the funds.

Debt

Debt

Debt

Why all these useless debts

Too much corruption

Effects of over 50 years of subsidy,which most people on this site support and still support.

Too bad we didn't remove subsidy in 1992...by now all this nonsesne would have ended since and NNPC would have been like PETRONAS of Malaysia and other big time oil companies.

For anyone asking why I say the above, removing subsides in 1992 would have made NNPC a company working for its profit back then. The result would be less debt and more profitablity in the long run.

There is a reason why subsidy removal has been mentioned several times..in 1993, 2005, 2011, and up till 2023 when it was removed. A company is wrecked by government setting its prices. Yet everytime it was called for, we said no.

(Amusingly, the tinubu supporters who opposed subsidy removal in 2011, are now defending it now while saying that their man was right in 2011..lol. The supporters of GEJ, Obi, Atiku and Biafra who were pro subsidy removal in 2011 now support its retention and restoration. Isn't it weird folks).

Put aside politics, a company will end up in problems if government does not let it make a profit. Story of NNPC's life.

Tinubu will write off the debts and ask them to sin no more.

NNPC is just a waste of resources

That's what apc is good at. Loot loot loot loot

Shut them down now , they are of no use than looting

nurey:
the way them dey call money these days leaves one bewildered. When there is no accountability, how do you expect citizens not to boycott paying tax? You collect our collective natural resources, still collect out sweat, all to live lavishly and for some set of people to misappropriate the funds.

bro, this wahala too much

NNPC has a debt of over N30 trillion, yet they are taxing us to death to have money they have stole.

Can you see what this government is doing with the masses. How can you tell me that the federal government is not part of this rubbish. No wonder the continue to tax the masses just to cover their looting. Despite removal of subsidy in 2023, the debt rose from 17 trillions to 30 trillions. What's now the effect of subsidy. No wonder Tinubu has enough money to bribe the governors to decamp. Nigeria can never get better. I hope Trump is watching everything going on cos masses are powerless.

No reason to panic. Tinubu will unilaterally write it off again like a monarch.

President Donald Trump need to come for Aso villa Bandit

Latest findings from NNPC’s 2024 audited financial statements showed that debts owed by subsidiaries, joint ventures, and other related entities rose by 70.4 per cent, or N12.52tn, from N17.78tn in 2023 to N30.30tn as of December 31, 2024. The sharp increase has raised fresh concerns about the company’s liquidity management and long-term financial sustainability.

Tinubu is the federal minister of petroleum resources 🤷🏿.
New APC governors are getting 250B naira, nobody is saying anything 🚩. State capture will backfire

Venezuela is the richest in oil reserves but finances can't be accounted for 🤷🏿. Shey wuna dey see as the matters dey evolve.
Emilokan will plunge this country into disaster.
Ranging from state financial capture, drugs, insecurity, election rigging, .

To be honest, I really won't care if this country burns!! Too much filth, corruption & incompetence. Make everybody just disappear jare

Just No freaking Comment!

IBB007:
Lol…I no really blame atiku wey talk say he go privatize this NNPC…the corruption there is just too much

Apart from the corruption, there is also the fact that private entities work better than public ones for the society in employment and revenue generation instead of being bottomless pits of eternal subsidy payments. This is the case with NNPC's petrochemicals division that was privatised to Indorama in 2006.

The Atiku/Obasanjo PDP administration privatised NNPC refineries, but communist labourers working under subterfuge influence of propagandist progreThieves pressured Yar'Adua to rescind the sales. Thankfully PDP's Jonathan licensed Dangote refinery as part of the 2012 deregulation of the fuel sector, like PDP did successfully for the telecoms sector 27 years ago.

Can you imagine how much crisis we would have with only NNPC refineries of propaganda

Princecalm:
Jul 29, 2015

The Nigerian National Petroleum Corporation has announced that the Port Harcourt and Warri refineries have been successfully re-streamed after a nine-month rehabilitation exercise conducted by its in-house engineers and technicians.

The corporation, in a statement, noted that both plants commenced preliminary production of petroleum products after successful test-runs, adding that while PHRC was ramping up its operation to about 60 per cent of its 210,000 barrels per day capacity, WRPC production was projected to hit 80 per cent of its installed 125,000bpd capacity.

The NNPC said the Port Harcourt refinery was projected to boost the nation’s local refining capacity with a product yield of five million litres of petrol per day, while Warri refinery would contribute 3.5 million litres of petrol.

Providing insight into the rehabilitation exercise, the NNPC noted that it had to adopt the phased rehabilitation strategy after the Original Refinery Builders, who were initially contacted for the project came up with unfavorable terms.

It said, “Though a decision was taken in 2011 to rehabilitate all the refineries using the ORB of each of the refineries, we were impelled to switch strategy after the ORBs declined participation and nominated some partners in their stead who came up with outrageously unfavorable terms.”

The NNPC stated that the nominated partners, as sole-bidders, came up with humongous price offers after two years of thorough and exhaustive scope of work definition and price negotiations.

It added that the proxies were also unwilling to provide post rehabilitation performance guarantees.

The corporation said, “The phased rehabilitation strategy which entailed phased and simultaneous rehabilitation of all the refineries using in-house and locally available resources in line with the spirit and letter of the Nigerian Content Law, also involved the use of Original Equipment Manufacturer representatives to effect major equipment overhaul and rehabilitation.”

The national oil firm said the phased rehabilitation programme, which started in October 2014 after the required funding stream was established, created a 70 per cent reduction in costs which helped largely in mitigating the financing challenges of refinery rehabilitation.

It observed that with the successful re-streaming of the PHRC and WRPC, attention has now moved to the 110,000 barrels per day Kaduna Refining and Petrochemicals Company which was billed to come on stream soon.

http://www.punchng.com/news/pharcourt-warri-refineries-commence-preliminary-operations-nnpc/

>>
>>>>

saintopus:
Dec 06, 2024
The PH Refinery ships its first export of petroleum products to Dubai.
The company is expected to load the cargo in the coming days onboard the Wonder Star MR1 ship, signalling the commencement of operations at the plant and the exportation of petroleum products.

The ship will load 15,000 metric tons of the product, which translates to about 13.6 million litres.

Although the volume coming from the NNPC into the global market is still small, the development has the potential to impact the Very Low Sulphur Fuel Oil (VLSFO) benchmarks in the future while changing the market realities for Atlantic Basin exporters into Nigeria and other regions.

The sulfur content of the export by NNPC stands at 0.26 per cent per wt and a 0.918 g/ml density at 15°C, according to Kpler, a data and analysis company.

The cargo was reportedly sold at an $8.50/t discount to the NWE 0.5 per cent benchmark on a Free on Board (FOB) basis.

Kpler reported that the development would help displace imports from traditional suppliers in Africa and Europe, as Nigeria’s falling clean product (CPP) imports are already decreasing, dragging imports into the wider West Africa region lower as well.

https://guardian.ng/energy/nnpc-begins-export-from-ph-refinery-as-dubai-firm-buys-first-cargo/

AMINDA:
No reason to panic.

Tinubu will unilaterally write it off again like a monarch.

He will write it off to reappear in Bourdillon bullion vans to buy votes and bribe politicians for his reelection and 3rd term agenda.

Tinubu is set to succeed where Obasanjo failed with his 3rd term agenda for life president as France is aiding Cameroon's Biya to be.

Who will help us stop this APC extreme poverty shege that Tinubu packaged as positive change 11 years ago with his expired Buhari of 2011



https://www.youtube.com/watch?v=vPytmuhYDAU

NaijaRoyalty:
…Says Buhari doesn’t have my kind of money

However, Buhari doesn’t have the kind of money I can steal neither does he have the money I can collect. He doesn’t even have the money for Lagos votes. So, whatever I promise, it’s for real and is coming from my pocket. It’s not until I go to Alausa before I get money to give you.”

Addressing APC supporters on the need to deliver votes, Tinubu said handsome cash rewards await those who can deliver votes for the party.

He said he would not make mistakes of the past where people would collect money in advance and not deliver on election day.

Tinubu added, “Those of you that say you come to Bourdillon for mobilisation, it is mobilisation that we are doing here or don’t you understand? Definitely, if you know people in your neighbourhood, our members, how we used to do.

https://www.google.com/amp/s/punchng.com/i-said-i-was-richer-than-osun-state-tinubu-admits/%3famp

How did they Incurred Such Huge Debts for Nigeria to Pay?
It is the Greatest of All Fraud - in Any Govt Establishment and is govt trying to Pay-Off the Debt- without making those who committed these Illegal Acts to Account?
President Tinubu- Nigerians are Watching!

Govt businesses are always at a loss because the leadership and staff are always in a race to steal them blind because it is govt pickin,nobody own am.
When people cry that Govt should start a firm or enterprise,I always laugh.Just consider those companies gone as soon as they are established.

Putinofrussia:
Govt businesses are always at a loss because the leadership and staff are always in a race to steal them blind because it is govt pickin,nobody own am.
When people cry that Govt should start a firm or enterprise,I always laugh.Just consider those companies gone as soon as they are established.

That is not always true o. There are companies owned by Oodua group existing for over 70 years and they are thriving. The Chinese government made over 300 billion dollars from state owned enterprises in 2024.

This is just the beginning since Tinubu is willing to sweep their 200trillion Naira fraud under the carpet why not continue in a larger scale now . This will result in extra borrowing and extra taxes

If producing crude oil will lead to such a huge loss then Nigeria should stop oil production, this is shameful nationally. are they producing for their pockets or what?

why is Nigerian case so different when other countries are making fortune from OIL PRODUCTION


Until The Oil Dries.......

adenigga:
Source: https://punchng.com/nnpc-subsidiaries-debt-balloons-70-to-n30tn

adenigga:
Source: https://punchng.com/nnpc-subsidiaries-debt-balloons-70-to-n30tn

Obviously we are still paying subsidy

lawani:
That is not always true o. There are companies owned by Oodua group existing for over 70 years and they are thriving. The Chinese government made over 300 billion dollars from state owned enterprises in 2024.

I was talking about an unserious FG that had been majorly run by the North who only look at Nigeria as something they should eat and not grow.If you are from other region,You join them in eating Nigeria down,you are even a minority in their midst.
If the North doesn't change in giving Nigeria problems upon problems,Nigeria will inevitably divide.
Odua group is different because they have congent goals of growth and development unlike Nigerian FG established firms.

na problem upon problem.
na insecurity dem bring now

Putinofrussia:
I was talking about an unserious FG that had been majorly run by the North who only look at Nigeria as something they should eat and not grow.If you are from other region,You join them in eating Nigeria down,you are even a minority in their midst.
If the North doesn't change in giving Nigeria problems upon problems,Nigeria will inevitably divide.
Odua group is different because they have congent goals of growth and development unlike Nigerian FG established firms.

Putinofrussia:
I was talking about an unserious FG that had been majorly run by the North who only look at Nigeria as something they should eat and not grow.If you are from other region,You join them in eating Nigeria down,you are even a minority in their midst.
If the North doesn't change in giving Nigeria problems upon problems,Nigeria will inevitably divide.
Odua group is different because they have congent goals of growth and development unlike Nigerian FG established firms.

It is not the North. Not only Northern states are depending on FG handouts. It is just an unfortunate situation caused by the military incursion into politics. All Governors that have led their states and LG chairmen that led their local governments without going after the revenue granted them by the constitution to bring change are to blame. What Tinubu is doing is what he did in Lagos. He is going after the revenue granted to the FG by the constitution and he may end up reducing oil income to less than ten percent of fg revenue. If I am a governor of a state or a LG chairman the majority of my revenue will be igr and not allocations.

If there is enough non oil revenue in Nigeria the country will be more likely to break up because the oil revenue is the main thing holding the country together

Putinofrussia:
Govt businesses are always at a loss because the leadership and staff are always in a race to steal them blind because it is govt pickin,nobody own am.
When people cry that Govt should start a firm or enterprise,I always laugh.Just consider those companies gone as soon as they are established.

What do you expect government organisations (nationalized organisations that are never created for profits if not debts and loss?

nurey:
the way them dey call money these days leaves one bewildered. When there is no accountability, how do you expect citizens not to boycott paying tax? You collect our collective natural resources, still collect out sweat, all to live lavishly and for some set of people to misappropriate the funds.

I'm actually working on ways to bycot the paying of tax to the corrupt Nigerian government. I cant be paying tax while some lazy buffoon will be stealing all the money and using same to finance his lazy life.