After posting N267bn loss in 2015 from marketing crude and refined petroleum products and accumulating cash call debts of over $6bn to joint venture partners as well as cash constraints to fund key operations, some analysts conclude that NNPC’s underlying problem is that it is insolvent.
Several independent and government-commissioned audits have also given credence to NNPC’s insolvency. With the corporate headquarters of the oil firm posting the heaviest loss and its product supply and distribution arm, the Pipelines and Products Marketing Company (PPMC) coming close, followed by all the three refineries, the questions remain, how has these contributed to NNPC being financially handicapped? In all fairness, NNPC is not the only national oil company that has declared net losses for 2015 but how the corporation is stepping up its improvement programme and tightening operational expenditures are key elements in navigating the business, especially in this period of low oil prices. Oil and gas reporters gathered recently in a workshop in Lagos to learn about many grey areas that still exist in the corporation and concluded that three fundamental reasons account for NNPC’s financial incapacity. One big category of the corporation’s insolvency is its huge multi-billion dollar joint venture cash call obligations.

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