NNPCL Subsidiary Debts Hit N30.3tn, Raise Liquidity Concerns

Despite its transition into a commercial entity, the Nigerian National Petroleum Company Limited (NNPCL) is facing mounting financial pressure as debts owed by its subsidiaries and related entities surged to N30.30tn in 2024.

Findings from NNPCL’s 2024 audited financial statements show that inter-company receivables rose by 70.4 per cent, or N12.52tn, from N17.78tn in 2023 to N30.30tn as of December 31, 2024, raising fresh concerns over liquidity management and long-term financial sustainability.

The audited accounts revealed that most of the debts are owed by core operating subsidiaries, particularly refineries, trading units and gas infrastructure companies. Out of NNPCL’s 32 subsidiaries, only eight were debt-free in 2024.

Topping the list is the Port Harcourt Refining Company Limited, which owed N4.22tn, up from N2.00tn in 2023.

The Kaduna Refining and Petrochemical Company Limited followed with N2.39tn, while the Warri Refining and Petrochemical Company Limited owed N2.06tn.

The three refineries, despite multiple rehabilitation efforts, are yet to operate sustainably and remain heavily reliant on funding from the parent company.

NNPC Trading SA accounted for the largest single exposure, owing N19.15tn in 2024, more than double the N8.57tn recorded a year earlier.

Other subsidiaries with notable debts include NNPC Gas Infrastructure Company Limited (N847.98bn), Nigerian Pipelines and Storage Company Limited (N466.74bn), Gwagwalada Power Limited (N326.58bn) and Petroleum Products Marketing Company Limited (N264.75bn), among others.

Conversely, NNPCL’s obligations to its subsidiaries also rose, increasing by 44.7 per cent to N20.51tn in 2024 from N14.17tn in 2023.

Of this amount, NNPC Trading Limited was owed N16.36tn, while NNPC Exploration and Production Limited was owed N4.02tn.

The development comes amid ongoing reforms under the Petroleum Industry Act and NNPCL’s push to divest non-core assets, improve liquidity and attract external investment.

It also follows President Bola Tinubu’s approval of the cancellation of about $1.42bn and N5.57tn in legacy debts owed by NNPCL to the Federation Account.

NNPCL reported a Profit After Tax of N5.4tn in 2024 on revenue of N45.1tn, representing increases of 64 per cent and 88 per cent respectively over 2023.