An examination of the financial statements of the Nigerian National Petroleum Company Limited (NNPC) reveals that its subsidiaries incurred short-term debts amounting to N83 billion in 2022. According to the December 2022 financial statements, Nikorma Transport’s trade and other payables were N4.5 billion, West Africa LPG Limited’s trade payables stood at N79.2 billion, and Hyson Nigeria Limited had debts of N15 million.
West Africa LPG Limited functions as a vehicle for the offtake, marketing, and trading of Liquefied Natural Gas. It is identified on its website as a wholly-owned subsidiary of the NNPC and Ocean Bed Trading Limited. Altogether, the subsidiaries accumulated debts totaling N83 billion.
The NNPC’s financial statements also indicated that these subsidiaries posted losses. Specifically, the organization could not derive any profit from Nikorma Transport and West Africa LPG because their accumulated losses were greater than the profits of the NNPC subsidiaries. For example, the NNPC group share of profit for West Africa LPG was N807 million, but as of June 2022, its accumulated loss was N1 billion.
Additionally, the NNPC spent N7 billion on entertainment expenses over a 16-month period, according to the financial records published in December 2022.
Concerns about accountability within the NNPC have led to calls for the organization to publish its financial statements. Despite being in the seventh month of 2024, the NNPC has yet to release its 2023 financial statements. Reports by SaharaReporters highlight that the NNPC wrote off debts totaling N140 billion over three years between 2019 and 2021. One NNPC subsidiary even provided loans worth N2 billion to employees despite recording zero profit in 2021.
Past financial statements show that the NNPC has been funding loss-making subsidiaries amid ongoing operational challenges. This issue coincides with the announcement of various crude-backed loans obtained by the NNPC. In 2023, it was reported that NNPC Limited secured a $3 billion crude-backed loan. The Nigerian Extractive Industry Transparency Initiative (NEITI) also accused the NNPC of failing to remit N2.8 trillion in taxes to the government in 2022.
Join our WhatsApp channel for updates: https://whatsapp.com/channel/0029VabITrvEAKW7DSkTfP0J.