The financial position of Nigerian National Petroleum Company Limited came under renewed scrutiny after audited figures revealed a sharp escalation in debts owed by its subsidiaries, highlighting persistent balance sheet pressure despite the company’s commercial transition.
Data from the company’s 2024 audited accounts shows that inter-company receivables rose to ₦30.3 trillion as of December 31, 2024, representing a 70 percent increase from the prior year.
The surge reflects mounting obligations across refining, trading, gas infrastructure, and logistics units within the NNPC group.
The accounts indicate that while NNPC operates more than 30 subsidiaries, only a small fraction recorded no outstanding balances to the parent company during the period. Most subsidiaries posted higher payables year-on-year, pointing to ongoing structural weaknesses within the group’s operating model.
Refining subsidiaries accounted for a significant portion of the exposure. The Port Harcourt, Kaduna, and Warri refining entities collectively owed several trillions of naira by the end of the year, underscoring the continued financial burden of refinery operations that have yet to deliver sustainable commercial output despite repeated rehabilitation efforts.
NNPC’s trading operations also emerged as a major source of balance sheet strain. The group’s trading arm recorded a substantial increase in obligations to the parent company, reflecting higher financing needs tied to crude oil trading and product supply activities.
In parallel, NNPC’s payables to subsidiaries and related entities also increased during the period, indicating rising internal funding circularity within the group.
Analysts say the simultaneous build-up of receivables and payables raises questions about cash flow efficiency and internal financial discipline.
The sharp rise in subsidiary debts comes even as NNPC reported strong headline financial performance for 2024, supported by higher revenues and improved profitability.
Market observers, however, caution that growing internal balances can mask underlying liquidity challenges and weaken the quality of reported earnings.
The development also follows recent government actions to clean up legacy financial obligations between NNPC and the Federation Account. While those measures addressed historical liabilities, analysts note that the swelling inter-company debts highlight unresolved operational and structural issues within the group.
Borrowings at the company level also increased during the year, driven by funding requirements for energy and infrastructure projects.
NNPC has maintained that these loans are ring-fenced and do not represent group-wide debt, but the trend adds to concerns about rising leverage pressures.
As NNPC advances plans to divest non-core assets and attract external investors, the growing scale of subsidiary obligations is likely to remain a key focus for stakeholders.
Analysts say restoring balance sheet strength will require not only asset sales but also deeper reforms to subsidiary performance, cost structures, and capital allocation.
The latest figures reinforce the view that while NNPC has made progress in repositioning itself as a commercial entity, significant financial restructuring remains necessary to address internal debt accumulation and improve long-term sustainability.
