Nigerian National Petroleum Company (NNPC) Limited is delivering its best financial results in years, with profits climbing steadily and revenue expanding at double-digit rates. However, findings by SBM Intelligence reveal a growing N6.3 trillion liabilities beneath those headline numbers.
NNPC reported a profit after tax of N4.6 trillion in 2024, up from N3.3 trillion a year earlier, according to its audited results.
Revenue climbed 32 percent to N31.5 trillion over the same period, with both figures projected to rise further in 2025 as the company eyes N5.1 trillion in net earnings on N35.2 trillion in revenue.
The profit margin has held steady at roughly 14 percent throughout, a consistency that has drawn favourable comparisons with other state-owned oil firms across the continent.
Yet a February 2026 report by Lagos-based research firm SBM Intelligence argues that these numbers tell only part of the story, and perhaps not the most important part.
“NNPC’s headline profits may be masking deeper vulnerabilities,” SBM Intelligence wrote in its report titled NNPC’s Rising Profits Obscure Deepening Debt Burdens. “As the company navigates volatile exchange rates and mounting obligations, stakeholders should look beyond the surface to the underlying issues.”
Hidden liabilities
The most striking finding in the SBM report concerns liabilities that do not appear on NNPC’s primary financial statements.
The firm identified off-balance-sheet commitments totalling more than N6.3 trillion as of the 2023 financial year, equivalent to roughly $4 billion at current exchange rates.
The largest component is a N5.4 trillion debt owed to refineries, and N890 billion is tied to cash commitments embedded in forward sale agreements. The company also set aside N18.14 billion in litigation provisions during the year, adding another layer of contingent risk.
These obligations, SBM argues, complicate the narrative of a company on a solid financial footing.
Off-balance-sheet liabilities of this scale are not unusual in the global oil industry. Still, their concentration in a single state-owned entity operating in a volatile environment and with limited fiscal transparency raises distinct concerns.
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The subsidy receivable problem
Compounding the picture is a N5.1 trillion subsidy reimbursement that the federal government owes NNPC. This amount technically counts as a receivable and, if paid, would bolster the company’s asset base. But SBM Intelligence cautions against treating it as a straightforward financial positive.
The existence of the receivable underscores what analysts describe as the opaque entanglement between NNPC and Nigeria’s federal budget.
For years, the company served as an informal financing arm for fuel subsidies, absorbing costs that were never fully reimbursed. While the government officially ended the petrol subsidy regime in 2023, legacy obligations remain, and their resolution depends as much on political will as on accounting.
“The subsidy receivable exemplifies the opaque nature of its finances,” the SBM report stated, warning that dependence on government reimbursements introduces uncertainty into cash flow planning that headline profit figures do not capture.
Balance sheet
NNPC’s formal balance sheet does show genuine improvement. Total assets are projected to reach N255 trillion in 2025, up from N240 trillion in 2024, while liabilities are expected to grow more modestly, from N205 trillion to N212 trillion. That divergence implies equity expansion from N35 trillion to N43 trillion, a meaningful increase in the company’s net worth.
Long-term debt is also declining, forecast to fall from N18.5 trillion in 2024 to N17.2 trillion in 2025. The debt-to-equity ratio is expected to improve from 0.53 to 0.40, a trajectory that most creditors and rating analysts would view favourably.
The risk, however, is that these metrics do not incorporate the off-balance-sheet exposures that SBM has flagged. If those liabilities were consolidated into the formal statements, the picture would look considerably different.
Costs climbing
Meanwhile, operating expenses are trending upward. Personnel costs are forecast to rise 14 percent to N545 billion in 2025. Statutory donations, covering host community development trusts, security support and education scholarships, climbed from N188 billion in 2024 to N208 billion in 2025. And in 2023, discretionary donations surged more than 3,500 percent year-on-year, though the absolute figure remained relatively modest at N11.35 billion.
These rising costs, layered on top of legacy debts and subsidy exposures, present a compounding challenge for management as it seeks to sustain the profit growth that has defined recent years.
Sustainability questions
NNPC’s profit trajectory has positioned it among Africa’s most financially productive state-owned oil companies, a status Nigerian officials have been eager to highlight as evidence of post-subsidy reform dividends.
The question analysts are beginning to ask is how durable that performance will prove once deferred obligations come due.
