Strategic Reforms and Cost Reductions Drive Nigerian National Petroleum Company’s Performance
The Nigerian National Petroleum Company Limited (NNPC) has made significant strides in improving its operational efficiency, reducing costs, and enhancing transparency. The company reported a remarkable $3.4bn reduction in operating costs through an aggressive contract restructuring and optimisation programme. This achievement marks one of the most substantial efficiency gains since NNPC transitioned into a commercially driven enterprise.
At the opening ceremony of the 25th NOG Energy Week in Abuja, the Group Chief Executive Officer (GCEO) of NNPC Limited, Bashir Bayo Ojulari, presented the company’s one-year performance scorecard. He highlighted that these cost savings were achieved without compromising operational efficiency, reinforcing the company’s strategy of prioritising value delivery to the Federation and investors.
Key Performance Metrics
According to Ojulari, the performance report showcased several improvements across critical areas, including crude oil production, gas output, government revenue, export terminal efficiency, and operational transparency. The company recorded a six per cent increase in crude oil production, reaching 569.7 million barrels year on year. Gas production also saw an 8.1 per cent rise, amounting to 2,576 billion standard cubic feet.
Additionally, NNPC’s contribution to government revenue increased by 21.8 per cent to N19.5tn over the review period. Ojulari emphasized that these metrics are not just numbers but indicators of the company’s successful transformation through operational discipline, commercial efficiency, and strategic reforms.
Production Targets and Infrastructure Recovery
Ojulari revealed that Nigeria’s crude oil production had reached about 1.71 million barrels per day, the highest level in five years. Furthermore, NNPC Exploration and Production Limited achieved a record production of 365,000 barrels per day. The company aims to raise crude oil production to two million barrels per day by 2027 and three million barrels per day by 2030.
The GCEO attributed the improvements in production to enhanced operational stability and infrastructure recovery across the country’s oil-producing assets. Nigeria’s crude oil export terminals recorded an average recovery factor of 98 per cent between April 2025 and May 2026, a significant improvement from the operational lows of barely one per cent at the Bonny Oil and Gas Terminal in June 2022.
Operational Stability and Investor Confidence
Ojulari noted that all major evacuation pipelines, including the Trans Niger Pipeline, Trans Escravos Pipeline, Trans Ramos Pipeline, Trans Forcados Pipeline, and the Oando-Brass line, are now operating at 100 per cent availability. This level of reliability has bolstered confidence among producers, investors, and international buyers.
He also announced that NNPC maintained 100 per cent compliance with all Joint Venture cash-call obligations throughout 2025 and into June 2026. However, he acknowledged that some Joint Venture partners remained in partial or significant default, forcing the national oil company to shoulder additional funding responsibilities in certain ventures.
Commercial Milestones and Strategic Partnerships
Beyond operational performance, Ojulari highlighted several strategic commercial milestones. NNPC signed landmark Gas Sale and Purchase Agreements covering 1.29 billion standard cubic feet per day of long-term LNG feed gas and another 750 million standard cubic feet per day for domestic industrial gas supply to DFL FZE and Dangote Refinery. These agreements are expected to unlock more than $20bn in associated investments, with seven additional commercial transactions already under negotiation.
The company also resumed full monthly remittances to the Federation Account in July 2025, reinstated monthly business performance reporting, and hosted its first-ever earnings call in November 2025 as part of efforts to deepen transparency and strengthen investor confidence.
Vision for Africa’s Energy Future
Speaking on the broader outlook for Africa’s energy industry, Ojulari urged governments, investors, regulators, and operators to deepen collaboration rather than pursue isolated investments. He argued that fragmented partnerships remain one of the biggest constraints to Africa’s energy transformation despite the continent’s abundant resources.
Ojulari stressed the importance of building strategic partnerships, integrated value chains, and competitive industrial economies. He noted that while Africa holds approximately 17 per cent of global natural gas reserves alongside vast crude oil and renewable energy resources, the continent still receives only a small fraction of global energy investment.
Conclusion
NNPC Limited has intensified its commercial transformation since becoming a fully incorporated company under the Petroleum Industry Act. Over the past year, the company has focused on improving operational efficiency, reducing production costs, increasing transparency, and attracting fresh investments into Nigeria’s oil and gas sector.
The latest scorecard comes as the Federal Government pursues higher crude oil production, expanded gas utilisation, and stronger investor confidence through reforms, infrastructure upgrades, and enhanced security across oil-producing assets. The cost reduction is a critical factor in improving Nigeria’s competitiveness, particularly as global oil companies increasingly prioritise lower-cost, lower-carbon projects when allocating investment capital.
