NNPC Profits Soar While Subsidiary Debts Explode by 70%

NNPC Profits Soar While Subsidiary Debts Explode by 70%

The Nigerian National Petroleum Company Limited (NNPC) is facing a deepening financial paradox. Despite its recent transition into a commercial, profit-seeking entity, the company is grappling with a massive internal debt crisis, as underperforming subsidiaries have pushed inter-company obligations to a staggering ₦30.30 trillion.

According to the NNPC’s 2024 audited financial statements—analyzed this Sunday—the debts owed by subsidiaries, joint ventures, and related entities surged by 70.4% in just one year, jumping from ₦17.78 trillion in 2023.

The ballooning debt is largely driven by core operating units that remain operational “black holes.” Out of NNPC’s 32 subsidiaries, only eight are currently debt-free.

Topping the list of internal debtors is NNPC Trading SA, which owes the parent company ₦19.15 trillion —more than double its 2023 balance. The nation’s struggling refineries also contributed significantly to the surge:

• Port Harcourt Refining Company: ₦4.22 trillion (up from ₦2.00tn)
• Kaduna Refining & Petrochemical: ₦2.39 trillion (up from ₦1.36tn)
• Warri Refining & Petrochemical: ₦2.06 trillion (up from ₦1.17tn)

Despite repeated turnaround maintenance cycles, these refineries have yet to achieve commercial viability, remaining tethered to the parent company for survival.

In a significant contrast to the rising debt levels, NNPC’s headline numbers remain strong. Group Chief Executive Officer, Bashir Bayo Ojulari, highlighted the company’s growth during the presentation of the 2024 results.

“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,” Ojulari stated.

However, analysts warn that these profits could be undermined by liquidity pressures if the ₦30.30 trillion in receivables remains uncollected.

The financial strain comes even as the Federal Government attempts to clean up the company’s books. President Bola Tinubu recently approved a massive reconciliation effort, wiping off $1.42 billion and ₦5.57 trillion in debts that NNPC owed to the Federation Account.

To further stabilize the balance sheet, NNPC is moving to divest from non-core assets. The company is currently reviewing its portfolio to sell stakes in:

• Refineries and pipelines.
• Power plants (such as the Gwagwalada and Kano IPPs).
• Storage and logistics infrastructure.

Petroleum economist Prof. Wumi Iledare argues that the staggering debt levels point toward structural flaws rather than a lack of funds. He noted that NNPC must act as a strict commercial holding company to survive in the global market.

Iledare warned that the ₦30.3tn inter-company debts recorded in the 2024 accounts highlight “deep-rooted structural and governance weaknesses, rather than outright insolvency.” He urged the company to end the practice of allowing these internal obligations to linger indefinitely.