The Nigerian National Petroleum Company Limited (NNPCL) is grappling with rising internal financial pressures as outstanding obligations owed to the company by its subsidiaries and related entities surged to ₦30.30 trillion in 2024, highlighting persistent liquidity challenges despite improved profitability.
Details from NNPCL’s 2024 audited financial statements show that inter-company receivables increased by ₦12.52 trillion, or 70.4 per cent, from ₦17.78 trillion recorded in 2023. The development has raised fresh questions about the effectiveness of internal controls and the pace of financial reforms following the company’s conversion to a limited liability entity under the Petroleum Industry Act.
A closer review of the accounts indicates that much of the debt build-up is concentrated among the national oil company’s operating units, particularly its refining, trading, and gas infrastructure subsidiaries. Out of NNPCL’s 32 subsidiaries, only eight reported no outstanding obligations to the parent company, while the rest carried varying levels of inter-company debt.
State-owned refineries featured prominently among the biggest debtors. The Port Harcourt Refining Company Limited recorded obligations of ₦4.22 trillion in 2024, more than double the ₦2.00 trillion posted a year earlier. The Kaduna Refining and Petrochemical Company Limited owed ₦2.39 trillion, while the Warri Refining and Petrochemical Company Limited posted ₦2.06 trillion, both reflecting significant year-on-year increases.
Although the refineries have undergone multiple rehabilitation and turnaround maintenance programmes aimed at restoring domestic refining capacity, they are yet to achieve consistent, commercially sustainable operations. As a result, they continue to rely heavily on financial support from the parent company.
NNPCL’s trading activities also contributed substantially to the rising receivables. NNPC Trading SA owed the company ₦19.15 trillion in 2024, more than double its ₦8.57 trillion balance in the previous year, underscoring the scale of internal funding within the group.
Additional outstanding balances were recorded across several subsidiaries involved in gas infrastructure, pipelines, power generation, shipping and marketing, further reflecting the widespread nature of the liquidity strain within the group structure.
The growing internal debt profile contrasts with NNPCL’s strong financial performance for the year. The company reported a profit after tax of ₦5.4 trillion on revenue of ₦45.1 trillion in 2024, representing significant growth compared with the prior year.
However, analysts caution that the widening gap between headline profits and internal debt levels points to underlying structural and governance issues. Petroleum economist Prof. Wumi Iledare said the figures highlight the need for NNPCL to operate as a true commercial holding company by enforcing clear settlement timelines and ending the practice of rolling over inter-company obligations.
The rising debts come as the company continues to pursue asset divestments and portfolio restructuring to improve liquidity and attract external investment. NNPCL has indicated plans to sell stakes in non-core assets, including refineries, pipelines, and power infrastructure, as part of efforts to strengthen its balance sheet and reposition itself as a globally competitive energy company.
Experts say resolving inter-company receivables and payables will be critical to the success of these reforms and to restoring investor confidence in NNPCL’s long-term financial discipline.
