Publisher of Oil & Gas Report, Toyin Akinosho, has said the controversy surrounding the Federal Government’s reported write-off of NNPC’s debts should not be misconstrued as proof that the national oil company is insolvent, stressing that the issue is rooted in accounting reconciliation rather than financial collapse.
Speaking during an interview with ARISE News on Tuesday, Akinosho said public outrage was understandable but cautioned against mischaracterising how profit, debt and reconciliation work in corporate accounting.
“I share the concern that most Nigerians genuinely feel that NNPC is punching below its weight,” he said. “So whenever we hear news like this, it’s something that everybody wants to sit up and have a conversation around.”
Akinosho explained that profit declarations are time-bound and cannot be assessed over an extended period such as a decade.
“The declaration of profit is a period thing,” he said. “You don’t declare profit over a decade. You declare profit within a particular space of time.”
He added that it was possible for a company to declare profits while still carrying debt.
“You can always be indebted and still declare profit. That’s the way business works. Business works on debt,” Akinosho said.
Addressing reports that the Federal Government had written off large debts owed by NNPC, Akinosho said the development stemmed from a reconciliation process between both parties.
“The way it sounds is like NNPC owes a whole lot and then the Federal Government clears it,” he said. “As a matter of fact, this was a result of reconciliation.”
According to him, NNPC and the Federal Government had longstanding claims against each other, arising from subsidy payments, production-sharing contracts, domestic supply obligations and repayment agreements.
“NNPC had been owed a lot of money by the Federal Government itself,” he said. “The Federal Government is claiming NNPC owes it money, and NNPC says the Federal Government owes it money. So both of them are constructing compounded interests over time.”
He likened the outcome to a net settlement.
“It’s a question of you owe me ten naira, I owe you fifteen naira, so who owes who?” Akinosho said. “When they sat for reconciliation, this is what they decided the quantum of money was, and that is what they wrote off.”
Despite clarifying the accounting basis of the write-off, Akinosho said Nigerians’ deeper concerns lay elsewhere.
“What Nigerians worry about is that we see a lot of borrowing, a lot of loans,” he said. “You sort of force-sell our crude, and we don’t understand what you’re doing with the money.”
He said his long-standing concern about NNPCL was its operational performance rather than its balance sheet.
“My focus on NNPC has always been the quality of operations, the execution capacity,” Akinosho said. “They could do more on the oil fields, deliver more barrels, make more money, and be more transparent in terms of what they remit to the federation account.”
According to him, greater transparency and operational efficiency would reduce public suspicion.
“When we get more of this, we will stop worrying about these little details about whether they owe this amount of money and are still claiming profitability,” he said.
On questions over whether the President had the authority to approve such a large debt reconciliation, Akinosho said he shared the concern but noted that relevant federal allocation institutions were involved.
“I’ve always worried whenever NNPC talks about taking money to do projects,” he said. “I’m always worried why the governors’ forum does not articulate concerns about how much comes into the federation account.”
While admitting he was not a lawyer, Akinosho said the involvement of federal allocation bodies suggested stakeholder interests were considered.
“That already gives you a sense that everybody’s interest has been taken care of, at least on the surface,” he said.
Turning to NNPC’s proposed asset divestments, Akinosho warned against assuming that selling equity alone would transform the company into a global oil giant.
“Just merely selling off equity does not necessarily translate to being a properly run company,” he said. “Companies like Aramco are properly structured and have been running something close to corporate governance for a long time.”
He said NNPC’s progress should be judged by operational delivery and transparency.
“We should be looking at execution capacity, what NNPC can deliver in terms of structuring itself as a proper profit-and-loss company,” Akinosho said. “We need transparent accounting that we can all see, not something we debate endlessly.”
He also criticised delays in critical gas infrastructure projects.
“We’ve been constructing the OB3 pipeline forever, and we haven’t solved the River Niger crossing in twelve years,” he said. “That pipeline is far more valuable because there is already a clear market waiting.”
Akinosho concluded that meaningful reform would depend on visible operational results rather than financial announcements.
“If NNPC improves its engagement with the public and we can see a clear line of sight to value,” he said, “then this planned sell-down might actually take us somewhere.”
Boluwatife Enome
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