The Nigerian National Petroleum Company Limited (NNPC) faces a difficult task in convincing private investors to buy into its proposed initial public offering (IPO), with mounting debts across its subsidiaries, questions over financial transparency and a history of loss-making assets threatening to undermine its market appeal.
Bashir Bayo Ojulari, NNPC’s group chief executive officer, said the company is considering selling between 5 percent and 10 percent of its shares, primarily to investors in Nigeria’s domestic capital market, with a possible secondary listing in London or New York.
But the proposed sale will test more than investors’ appetite for Nigeria’s oil and gas industry. NNPC must demonstrate that it can recover the billions tied up in subsidiary debts, account credibly for its financial obligations and convince the market that its businesses can generate sustainable returns. Without these assurances, its strategic importance may not be enough to make it an attractive investment.
For decades, NNPC operated as a government-controlled institution, carrying commercial responsibilities alongside national energy-security obligations and other policy considerations.
Its transformation into a limited liability company under the Petroleum Industry Act (PIA) in 2021 was intended to change that relationship, introducing a more commercially driven structure.
A stock-market listing would represent another major test of that transformation.
Investors are unlikely to be attracted simply by the size of Nigeria’s oil and gas reserves, the company’s strategic importance or its access to lucrative petroleum assets.
They will want evidence of predictable earnings, transparent financial reporting, credible corporate governance, disciplined capital allocation and a business model capable of generating sustainable returns.
Analysts said the numbers in its latest accounts, and the company’s transparency record, give buyers reasons to be cautious.
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Subsidiaries incur N12.9 trillion debt
The strongest evidence against a quick listing is on the balance sheet.
Data gleaned from the NNPC ‘s latest financial statement showed the company-level accounts list 34 related-party entries, including two joint ventures. Of the 32 subsidiaries, only nine owe the parent nothing. The rest carry balances from N99 million to more than N4 trillion.
“Debts run both ways; outsiders cannot easily tell how much will ever be collected. A prospective buyer would have to ask whether the receivables are assets or accounting entries. Consolidated accounts net out such balances, but the exposure remains,” said Tunde Akinbobola, head of research at Association of Energy Engineers (AEE).
Port Harcourt Refining Company is the largest debtor at N4.03 trillion. Kaduna Refining and Petrochemical Company owed N2.31 trillion, and Warri Refining and Petrochemical Company owed N1.97 trillion.
A year earlier, Port Harcourt owed N4.22 trillion, Kaduna N2.39 trillion and Warri N2.06 trillion, a combined N8.67 trillion. The three plants cut their debt by roughly N360 billion, about 4 percent, in a year.
“A refinery that cannot generate steady revenue cannot service an internal loan, so these balances are really a measure of how much the parent has sunk into them,” said Aisha Mohammed, a senior energy analyst at the Center for Development Studies. “The question is whether anyone expects to collect or whether this is a write-off waiting for a date.”
The refineries are not the only debtors. NNPC Trading Limited owed N1.46 trillion. NNPC Gas Infrastructure Company owed N969.1 billion, and Nigerian Pipelines and Storage Company owed N686.8 billion. Gwagwalada Power owed N622.9 billion.
The remainder is spread across about 20 smaller units. NNPC Energy Services owed N273.9 billion, Maiduguri Emergency Power Plant N213.3 billion and NNPC Medical Services N101.4 billion. NNPC Gas Marketing owed N77.6 billion, and NNPC Shipping and Logistics owed N77.4 billion.
Several power-sector units also appear. Kaduna IPP owed N5.1 billion, Kano IPP N1.4 billion and Antan Producing N4.3 billion.
Experts said the concern for outside investors is whether these debts will ever be repaid or are a quiet record of money spent on assets that do not earn.
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Investor confidence hurdles from past failures
The debt figures would be a harder sell even for a company with a clean record. NNPC’s record is not clean.
For decades, the corporation operated as a state agency with little public disclosure. It did not publish audited financial statements for long stretches, and critics accused it of mixing commercial decisions with government policy.
Under the fuel subsidy regime, it often sold petrol below cost and waited for the government to settle the difference, which left it exposed to delayed or disputed payments. Subsidy removal under President Bola Tinubu ended that arrangement, but questions about past balances have not gone away.
“You fix the reporting first, you deal with the loss-making assets second, and you list third. If you reverse that order, the market will price in every doubt,” Mohammed said.
In November 2025, the Senate gave NNPC three weeks to explain what lawmakers called N210 trillion in audit discrepancies.
The company disputed the characterisation. Some analysts argued the figure reflected poorly explained accounting rather than missing money.
Still, the exchange showed how thin the credibility is. A company that must defend its own audit in public will struggle to price a share offering.
Earlier episodes still hang over the company. The Nigeria Extractive Industries Transparency Initiative reported in 2023 that NNPC and 12 other entities failed to remit $9.85 billion in a single year.
A 2019 court order to recover $62 billion in underpaid production-sharing revenue also named the company.
Many of those matters are unresolved, and some are contested.
How others got it right
Gulf producers offer a model, and NNPC says it is studying it. Ojulari pointed to Abu Dhabi National Oil Co., which has listed units without giving up control.
The Gulf companies sold small stakes in specific businesses and generally kept their main oil-producing divisions off the table.
Saudi Aramco’s 2019 listing sold 1.5 percent of the company and raised $25.6 billion, the largest IPO in history at the time.
It was priced at the top of the range and was oversubscribed among individual investors. The sale was small relative to the company, and the state kept control and most of the cash flow. The government also spent years preparing the accounts and the legal framework before offering shares.
ADNOC followed the same pattern, one business at a time. Its drilling unit raised more than $1.1 billion in 2021 and rose over 30 percent on its debut in Abu Dhabi.
Its gas business raised $2.5 billion in March 2023 and was priced near the top of the range, in the year’s biggest listing.
Each sale was a clean, profitable business with predictable cash flows, not the whole group.
Dipo Oladehinde is a skilled energy analyst with experience across Nigeria's energy sector alongside relevant know-how about Nigeria’s macro economy. He provides a blend of market intelligence, financial analysis, industry insight, micro and macro-level analysis of a wide range of local and international issues as well as informed technical rudiments for policy-making and private directions.
