The cost of running the board and workforce of the Nigerian National Petroleum Company Limited rose sharply in 2024, with directors’ fees and expenses climbing to N4.096bn, while total spending on employee benefits surged to N749.7bn, according to the company’s audited financial annual report.

An analysis of the 2024 Annual Report by The PUNCH, on Thursday, showed that directors’ fees and reimbursable expenses increased by about 58 per cent from N2.593bn in 2023.

This figure indicates an increase of 214 per cent from N824m paid to the directors in 2022. “NNPC Limited directors’ fees and expenses rose to N4.096bn in 2024, up from N2.593bn in 2023,” the report read.

In the same year, the national oil company recorded zero staff resignations across all age brackets for the second consecutive year, a development linked to improved welfare packages and rising staff-related expenditure.

The report indicates that the 11 board members served throughout the 2024 financial year without changes, contributing to the higher directors’ costs disclosed in the accounts.

Throughout 2024, the board was chaired by Chief Dr Pius O. Akinyelure, with Mallam Mele Kolo Kyari as Group Chief Executive Officer. Alhaji Umar Isa Ajiya served as Group Chief Financial Officer until November 2024, ahead of the appointment of Mr Adedapo Segun, who later joined the board.

Other non-executive directors included Amb. Nicholas Agbo Ella, Mr Okokon Ekanem Udo, Mr Ledum Mitee, Mr Musa Tumsah, Dr Ibraheem Ghali-Mohammed, Prof Almustapha Aliyu, Mr David Ogbodo, and Mrs Eunice Thomas.

Many of the directors’ tenures, the report noted, ended on April 2, 2025, when President Tinubu dissolved the board and appointed a new leadership led by Engr. Ahmadu Musa Kida as chairman and Engr. Bashir Bayo Ojulari as Group CEO.

Despite the rise in board expenses, total compensation paid to NNPCL’s key management personnel fell marginally in 2024. Short-term employee benefits for key executives rose to N985m from N818m in 2023, while post-employment pension and medical benefits declined to N380m from N631m.

Overall, total compensation paid to key management personnel stood at N1.365bn in 2024, down from N1.449bn in the previous year. The company explained that the figures represent expenses recognised during the reporting period and cover only key management personnel, defined as the Group CEO, CFO, General Counsel, and Company Secretary, and all Executive Vice Presidents.

Beyond board and executive costs, the report shows that NNPC spent N749.7bn on employee benefits at the Group level in 2024, up from N581.8bn in 2023. A review of the workforce data shows that no employee aged between 30 and 59 resigned voluntarily during the year. All exits from service were due to mandatory retirement between the ages of 60 and 65, mirroring the pattern recorded in 2023.

The breakdown of staff-related spending includes N272.7bn on salaries and wages, N79.1bn on staff allowances, and N40.5bn on welfare expenses. Pension costs under the defined contribution plan stood at N44bn, while gratuity charges rose to N84.4bn. Post-employment medical benefits amounted to N3.3bn, and long-term employee benefits stood at N4.4bn.

At the company level, employee benefit expenses were put at N192.3bn in 2024. The report also showed that staff mortality assumptions remained stable, with deaths per 10,000 employees aligning with actuarial expectations across age brackets.

The zero-resignation trend underscores the strength of NNPC’s compensation and welfare framework, particularly since its transition into a limited liability company under the Petroleum Industry Act in 2021. Since becoming a commercial entity, NNPC has expanded spending on salaries, health cover, pensions, gratuities, and long-service awards.

However, the sharp rise in directors’ fees and staff-related costs is likely to intensify public scrutiny, especially amid economic pressures, fuel subsidy removal fallout, and ongoing debates over cost efficiency and value for money at the national oil company.

NNPC’s governance costs have come under closer public scrutiny since the company’s transition from a state corporation to a limited liability company under the Petroleum Industry Act, which requires stricter financial disclosures and transparency.

While supporters of the reforms argue that competitive remuneration is necessary to attract and retain top talent in a commercialised national oil company, critics have repeatedly raised concerns about rising administrative and board costs at a time of economic hardship and persistent revenue pressures.

Meanwhile, general and administrative expenses at the Nigerian National Petroleum Company Limited rose sharply in 2024, underscoring the growing cost of running Africa’s largest national oil company amid its transition to a fully commercial entity.

Figures from the company’s 2024 Annual Report show that total general and administrative expenses at the Group level surged to N3.58tn in 2024, up from N2.09tn in 2023. At the company level, expenses climbed to N1.66tn, compared with N994.08bn the previous year.

A major driver of the increase was employee benefit expenses, which jumped to N749.74bn at the Group level in 2024, from N583.8bn in 2023. At the company level, staff-related costs stood at N192.3bn, slightly lower than the N194.56bn recorded in 2023.

Depreciation charges also rose steeply. Depreciation of other property, plant, and equipment surged to N623.41bn in 2024 from N101.03bn a year earlier, reflecting asset revaluation, increased capitalisation, and expanded operations. Depreciation of right-of-use assets rose to N66.5bn, compared with N13.93bn in 2023.

Professional and consultancy fees recorded one of the sharpest increases, ballooning to N699.67bn at the Group level in 2024, from N184.2bn the previous year. At the company level, consultancy costs rose to N544.17bn, up from N81.64bn, highlighting growing reliance on external advisory and technical services.

Spending on software licences and maintenance also climbed significantly to N210.06bn at the Group level, from N66.59bn in 2023, while security expenses increased to N271.37bn, compared with N170.7bn the previous year, reflecting persistent security challenges across oil and gas assets.

Other cost lines also trended upward. Transport and travelling expenses doubled to N91.55bn, while training and recruitment costs rose to N90.39bn from N48.95bn. Entertainment expenses climbed to N30.34bn, up from N7.44bn, and spending on local community development increased to N29.89bn, compared with N6.87bn in 2023.

NNPC also recorded N27.76bn disbursement under the Host Community Development Fund, reflecting obligations under the Petroleum Industry Act, while fuel and lubricants expenses stood at N27.4bn.

The company further disclosed N118.78bn in fines and penalties, an expense line that did not appear in the prior year’s comparative figures. While audit fees stood at N3.16bn, slightly higher than N2.68bn recorded a year earlier.

On the asset side, the company reported N98.07bn as impairment on assets held for sale, alongside N16.75bn written off as intangible assets and N633m in amortisation of intangible assets.

Despite increases across most cost lines, other expenses fell sharply to N146.87bn at the Group level in 2024, from N563.74bn in 2023, suggesting a reclassification or tightening in certain discretionary spending.

The sharp rise in NNPCL’s administrative and operating costs is expected to fuel renewed public and policy debate about cost efficiency, transparency, and value for money at the national oil company, particularly at a time of economic strain and heightened scrutiny of public-sector spending following fuel subsidy removal and broader fiscal reforms.