… as PPE jumps 59% …. beats peers in net margin
Nigeria’s state-owned oil company recorded one of the biggest asset expansions in its history last year after a massive jump in infrastructure spending pushed its property, plant, and equipment (PPE) to N104.5 trillion, up from N65.9 trillion a year earlier.
The nearly N39 trillion surge in PPE, disclosed in the Nigerian National Petroleum Company Limited’s 2024 financial statements, accounted for most of the company’s 55 percent rise in total assets to N162 trillion, highlighting the scale of its refinery rehabilitation programme and long-term infrastructure push.
Read also: FG backs indigenous 30,000bpd modular refinery in Delta
NNPCL has spent the past two years racing to overhaul the Port Harcourt, Warri, and Kaduna refineries, alongside pipeline networks and petroleum storage systems, in an effort to cut its multibillion-dollar annual imports of refined fuel estimated at N15.42 trillion in 2024, the highest on record.
The PPE jump suggests the company capitalised a significant portion of its refinery and midstream spending in 2024 as it works to bring domestic refining back online for the first time in about a decade.
But the aggressive expansion is being funded largely by debt. Total liabilities climbed 60 percent to N123.3 trillion, according to the statement. Borrowings, lease liabilities, and contract obligations all rose sharply, while decommissioning provisions surged to N14.8 trillion, reflecting long-term environmental and asset-retirement costs associated with its aging infrastructure.
The increase in liabilities outpaced the rise in equity, which grew to N38.9 trillion, driven mostly by revaluation gains rather than retained earnings. Liquidity remained relatively weak despite the asset expansion, with cash and cash equivalents rising only modestly to N10.3 trillion, highlighting the strain of financing large capital projects amid slow receivable recoveries.
Analysts say the balance-sheet expansion marks NNPCL’s transformation into a capital-intensive holding company but warn that the investment may not translate into immediate financial gains. Nigeria’s refineries have posted a decade of losses and have yet to operate at commercial capacity since rehabilitation work began.
“NNPCL is taking a big refinery bet,” said one Lagos-based energy analyst. “The question now is whether these assets become cash-generating or remain heavy but idle items on the balance sheet. The debt build-up means the company cannot afford operational underperformance once these refineries restart.”
NNPCL has not disclosed updated timelines for when all refineries will reach full commercial output or the expected utilisation rates. Analysts say throughput levels and cost efficiency will determine whether the PPE surge becomes a catalyst for long-term profitability or a burden that deepens the company’s financial pressure.
Despite the risks, the company’s asset expansion signals a strategic pivot aimed at strengthening domestic energy security and reducing exposure to volatile global fuel markets.
Read also: Petrol imports from Malta drop by 60% after Dangote refinery
NNPCL beats peers in net profit margin despite lower dollar earnings
While NNPCL’s net profit contrasts sharply with peers in dollar terms, examining the company’s performance using metrics such as net profit margin paints a picture of efficiency and operational performance.
The state-owned oil company posted a net income of N5.4 trillion for the year ended 2024 and a turnover of N45 trillion. That’s $3.6 billion at the bottom line level and $30 billion in revenue, assuming N1500/$1 was used as the average exchange rate.
In comparison with industry peers like the United States’ Chevron and Italy’s Eni, Chevron’s top line during the same period was $193 billion, while Eni’s was $98.7 billion.
On the bottom line, Chevron generated $17 billion, and Eni achieved $6 billion. However, when comparing using profitability ratios such as net profit margin, NNPCL outperformed with a profit margin of 12 percent, while Eni recorded 6 percent and Chevron 9 percent.