The Nigerian National Petroleum Company Limited (NNPC) has reported a sharp decline in its profit after tax, falling dramatically from N905bn in June to N185bn in July, representing a staggering 79.6 per cent drop. This decline comes despite a marginal increase in oil and gas production, highlighting the challenges the company faces amid volatile market conditions and rising operational costs.
According to NNPC’s monthly financial report released on Thursday, the company generated total revenue of N4.41tn in July, down from N4.57tn in June.
While oil production inched up from 1.68 million barrels per day (mbpd) to 1.7 mbpd, and natural gas output rose to 7.7 billion cubic feet (bcf) from 7.58 bcf, these increases were insufficient to offset rising costs and declining margins.
The July earnings also mark a continuation of a downward trend following June’s N905bn profit, which itself had fallen from N1.05tn in May.
April’s profit had stood at N926bn, indicating a three-month streak of declining profitability for Nigeria’s state oil company.
Despite the profit slump, NNPC reported notable progress in its infrastructure projects.
The Ajaokuta-Kaduna-Kano (AKK) gas pipeline and Obiafu-Obrikom-Oben (OB3) gas pipeline projects have reached 96 per cent and 83 per cent completion levels, respectively.
The company highlighted that upstream pipeline availability remains at an impressive 100 per cent, ensuring uninterrupted transport of crude and gas from production fields.
NNPC further detailed ongoing efforts to accelerate project completion. On the AKK pipeline, additional subcontractors have been deployed to expedite mainline works, while the OB3 River Niger crossing has commenced a revised execution strategy aimed at fast-tracking delivery.
The 113 km OB3 gas pipeline segment has been commissioned and is currently transporting approximately 300 million standard cubic feet per day (mmscf/d) of gas, sourced from producers including AHL 250, Platform, Chorus, and Xenergi.
The company emphasized its commitment to sustaining crude oil and condensate production while improving the uptime of production facilities.
Collaboration with stakeholders remains central to NNPC’s operational strategy, aimed at enhancing efficiency and maintaining energy supply reliability.
In addition, statutory payments from January to June 2025 totaled N7.97tn, underscoring the company’s continued fiscal contribution to government revenue despite profit volatility.
Analysts note that the sharp profit decline in July is partly attributable to the combination of persistent global oil price fluctuations, rising production costs, and operational expenses associated with large-scale infrastructure projects.
Even with slightly higher output, the financial returns have been impacted by tighter refining margins, elevated gas flaring costs, and currency fluctuations.
NNPC’s performance underscores the delicate balance the company must maintain between sustaining output, completing strategic projects, and managing operational expenditures in a highly dynamic global energy environment.
With oil production currently at 1.7 mbpd, the company continues to explore incremental production strategies, including enhanced recovery techniques and deepwater field development, to stabilize revenue streams.
Industry experts suggest that with continued focus on operational efficiency, project completion, and market-responsive strategies, NNPC may gradually recover profitability in the coming months.
However, careful management of project costs and optimization of gas and crude output remain critical to reversing the current profit downturn.