Despite its transition into a commercially driven entity, the Nigerian National Petroleum Company Limited (NNPCL) is facing mounting financial pressure as deepening inter-company indebtedness among its subsidiaries pushes total obligations owed to the parent company to a staggering N30.30 trillion.

Findings from NNPCL’s 2024 audited financial statements show that debts owed by subsidiaries, joint ventures and related entities surged by 70.4 per cent, rising from N17.78tn in 2023 to N30.30tn as of December 31, 2024. The sharp increase has sparked renewed concerns among energy analysts about liquidity management, weak commercial discipline and the long-term financial sustainability of Nigeria’s national oil company.

An analysis of the audited accounts reveals that several of NNPCL’s core operating units — particularly its refineries, trading arms and gas infrastructure subsidiaries — account for the bulk of the ballooning receivables. Out of the company’s 32 subsidiaries, only eight were found to be free of inter-company debt, leaving the majority operating with varying levels of financial obligations to the parent company.

This development comes at a sensitive time for NNPCL, which is still navigating the aftermath of its restructuring under the Petroleum Industry Act (PIA) and ongoing debates over the write-off of legacy debts owed to the Federation Account. Last week, reports confirmed that President Bola Tinubu approved the cancellation of about $1.42bn and N5.57tn in outstanding obligations owed by NNPCL to the Federation after a reconciliation exercise, a move aimed at easing pressure on the company’s balance sheet.

Subsidiaries Driving the Debt Surge

The audited report highlighted several subsidiaries with significant outstanding balances. Among them are the NNPC Gas Infrastructure Company Limited (N847.98bn), Nigerian Pipelines and Storage Company Limited (N466.74bn), Maiduguri Emergency Power Plant (N179.33bn) and Petroleum Products Marketing Company Limited (N264.75bn).

Other indebted entities include 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) and NNPC LNG Limited (N28.22bn), among several others.

In total, receivables from related parties climbed to N30.30tn in 2024, underlining the scale of internal liquidity pressures within the NNPCL group structure.

NNPC’s Own Obligations Also Rising

Conversely, NNPCL’s obligations to its subsidiaries and related entities also expanded significantly, rising to N20.51tn in 2024, up 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, which was owed N16.36tn as of December 2024, compared to N6.70tn a year earlier. NNPC Exploration and Production Limited was owed N4.02tn, while smaller balances were recorded for NNPC Retail Limited, NNPC HMO, Antan Producing Limited, and NNPC Gas Infrastructure Company Limited.

Energy experts say the rising inter-company balances reflect unresolved financial complexities from NNPCL’s transition from a state-owned corporation to a limited liability company.

Experts Warn of Structural Weaknesses

Reacting to the figures, petroleum economist Prof. Wumi Iledare described the N30.3tn debt burden as a governance issue rather than outright insolvency.

“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 deep structural weaknesses,” he said.

According to Iledare, most of the debt represents NNPCL “owing itself,” a situation that arises when subsidiaries continue operations without paying for crude, products or services, while losses are quietly carried forward.

“A 70 per cent jump in one year is a clear warning sign. Only eight out of 32 subsidiaries being debt-free tells us this is weak commercial discipline, not bad luck,” he added.

He stressed that writing off internal debts would only worsen accountability, urging NNPCL to enforce strict settlement timelines, restructure non-viable entities and hold subsidiary executives accountable for cash flow and profitability.

Borrowings More Than Double

Meanwhile, NNPCL’s borrowings more than doubled in 2024, rising from N55.7bn in 2023 to N122.8bn, driven largely by new loan arrangements and accrued interest. The loans were mainly used to fund strategic projects such as the Gwagwalada Independent Power Project (IPP).

Of the total borrowings, N70.56bn was classified as current liabilities, while N52.20bn was non-current, reflecting repayment obligations beyond 12 months. Despite this, the consolidated group reported no borrowings in both 2023 and 2024, suggesting the liabilities are company-level obligations.

Analysts warn that unless NNPCL urgently resolves its inter-company debt cycle and strengthens internal financial controls, the restructured national oil company risks recreating the inefficiencies of the old NNPC under a new corporate name.