Harrison EDEH

THE 2025 Audited Financial Statement for the Nigerian National Petroleum Company Limited (NNPCL) revealed  that total contract liabilities of the company stood at ₦8.69 trillion, with ₦8.25 trillion linked to forward crude-sale financing arrangements.

Accordingly,more than 186,000 barrels per day of future production were committed to debt servicing across Project Gazelle, Project Leopard and Project Leopard II, of which Project Gazelle accounts for 90,000 barrels per day, Project Leopard 35,000 barrels per day and Project Leopard II 61,250 barrels per day.

The national oil company further incurred ₦847.6 billion in interest expenses on these contract liabilities in 2025, meaning part of its future production and cash generation is already committed to meeting financing obligations.

The company also reported ₦11.2 trillion in receivables and advance claims from the Federal Government, up from ₦7.13 trillion in 2024. The claims were driven mainly by costs associated with securing oil and gas assets against theft and vandalism.

In September 2025, an outstanding ₦8.67 trillion energy security claim was reconciled and offset against royalties, taxes and dividends owed to the government, the report revealed.

Investment continues despite weaker revenue

As NNPC continued investing in infrastructure during the year for the Warri and Port Harcourt refineries, the company adopted a Technical Equity Partnership Model, under which technical partners can take equity stakes and share operational risks.

NNPC said it is targeting crude oil production of two million barrels per day by 2027 and three million barrels per day by 2030, alongside natural gas production of 12 billion standard cubic feet per day by 2030.

It also plans to mobilise $60 billion in upstream, midstream and downstream investment by 2030.

NNPC lost ₦10.9tn revenue but Added ₦1.8tn Profit

The national oil company also lost about ₦10.9 trillion in revenue in 2025 as lower crude oil prices and reduced white product volumes weighed on sales, but the company generated more cash and profit by tightening costs and increasing oil and gas production, the Advocate Times can report.

The company’s audited results for the year ended December 31, 2025 showed that revenue fell 24 per cent to ₦34.5 trillion from about ₦45.4 trillion in 2024.

Despite the revenue contraction, operating cash flow increased 16 per cent to ₦12.8 trillion, while profit after tax rose 33 per cent to ₦7.2 trillion from ₦5.4 trillion.

EBITDA, which measures operating earnings before interest, taxes, depreciation and amortisation, also increased 22 per cent to ₦18 trillion.

The results point to a significant shift in NNPC’s 2025 financial performance, as the company generated less revenue but converted a greater share of its business activity into cash and profit.

NNPC attributed the revenue decline principally to lower crude oil prices and reduced white product volumes following the deregulation of the downstream market in 2024.

“Our 2025 performance shows what disciplined execution and a capable workforce can deliver,” said Engr. Bashir Bayo Ojulari, Group Chief Executive Officer of NNPC Limited. “We are strengthening earnings, growing production and investing in the people and assets that will sustain value for our shareholders, communities and the Nigerian people.”

Higher output cushions revenue decline

A further review of the report shows that the revenue decline occurred despite stronger physical production.

For instance, Crude oil and condensate production averaged 1.77 million barrels per day, the company’s highest five-year average.

Total oil and condensate production reached 565.8 million barrels, up five per cent, while NNPC’s equity share increased 11 per cent to 223.7 million barrels.

Natural gas production also reached a three-year high, averaging 7.2 billion standard cubic feet per day, while total gas production rose nine per cent to 2,606.2 billion standard cubic feet, and NNPC’s equity share increased 11 per cent to 1,154.9 billion standard cubic feet.

The higher output, however, could not fully offset weaker prices and lower downstream product volumes.

Cost control lifts cash generation

NNPC’s stronger profitability was also supported by lower operating costs, with general and administrative expenses falling by about 25 per cent, declining from roughly eight per cent of revenue in 2024 to seven per cent in 2025.

Pipeline maintenance costs recorded an even sharper reduction, falling 90.8 per cent to ₦13.81 billion from ₦149.48 billion in 2024 as reliability of major trunklines improved.

The company also reversed provisions previously made against some long-standing receivables. Such provisions are amounts set aside where a company expects that money owed to it may not be recovered.

These factors helped NNPC increase profit even as its revenue base shrank.

Earnings per share rose 32 per cent to ₦35.9 from ₦27.2, while return on equity, a measure of the profit generated from shareholders’ capital, increased by 200 basis points to 16 per cent.

Stronger cash supports higher dividend

The 16 per cent increase in operating cash flow to ₦12.8 trillion is significant because it indicates that the stronger earnings were accompanied by increased cash generation from core operations.

The stronger cash position helped NNPC declare a ₦5.8 trillion dividend, up 35 per cent from 2024, even as the company also paid ₦22.3 trillion in taxes and statutory remittances to the Federal Government, representing a 39 per cent increase.

While NNPC generated ₦10.9 trillion less revenue in 2025, it still increased operating cash flow, profit, dividend and government remittances.