By Lemmy Ughegbe, Ph.D
Last Friday, I had the opportunity, alongside other stakeholders, to engage the Nigerian National Petroleum Company Limited (NNPCL) at an official session where its leadership explained the company’s 2025 performance, transformation agenda and strategic direction. The encounter was useful, not least because it provided some context beyond the imposing numbers contained in the company’s latest annual report.
The central message was unmistakable: NNPCL wants to be judged increasingly as a commercially driven energy company rather than through the institutional baggage of the corporation it replaced. There was considerable emphasis on gas commercialisation, infrastructure, stronger cash generation, shareholder returns and an ongoing transformation that management insists is not another freshly minted corporate slogan.
The numbers provide some basis for that optimism.
NNPCL closed 2025 with profit after tax of ₦7.2 trillion, up 33 per cent from ₦5.4 trillion in 2024. Operating cash flow increased 16 per cent to ₦12.8 trillion, return on equity rose to 16 per cent, while the company declared a record ₦5.8 trillion dividend. Crude oil and condensate production averaged 1.77 million barrels per day, its highest level in five years, while natural gas output averaged 7.2 billion standard cubic feet per day, a three year high.
Particularly striking during the engagement was the emphasis on gas. That makes strategic sense. Nigeria possesses enormous gas reserves and has for too long discussed gas potential more enthusiastically than it has commercialised it. NNPCL now presents the Ajaokuta Kaduna Kano pipeline, the Obiafu Obrikom Oben pipeline and associated gas processing infrastructure as foundations of a strategy that should connect gas supply to electricity generation, industry, transportation and exports.
There has been measurable progress. NNPCL says the 623-kilometre AKK mainline has been completed, while the River Niger crossing on the OB3 pipeline has also been successfully delivered. The company is targeting natural gas production of 12 billion standard cubic feet per day by 2030.
But impressive as these numbers are, an annual report should invite more than applause. It should invite scrutiny.
That scrutiny begins with an intriguing paradox in the 2025 accounts. NNPCL’s revenue fell 24 per cent to ₦34.5 trillion, largely because of lower crude oil prices and reduced white product volumes following deregulation. Yet profit after tax increased by a third. EBITDA rose 22 per cent to ₦18 trillion and earnings per share increased 32 per cent.
There is nothing inherently contradictory about earning more profit from less revenue. Improved margins, lower costs and greater efficiency can produce precisely that outcome. Indeed, if NNPCL is becoming leaner and more commercially disciplined, that deserves recognition.
But this is where the quality of earnings becomes as important as their quantity. The accounts contain substantial other and sundry income, incorporating various operational receipts as well as accounting adjustments. For a company declaring ₦7.2 trillion in profit, Nigerians are entitled to understand how much of that performance arose from recurring core operations and how much derived from exceptional or non recurring items.
That distinction is not an accusation of impropriety. A legitimate accounting gain is still a legitimate gain. But recurring income generated by producing and selling oil or gas is economically different from a one-off accounting reversal. One tells us something about the company’s continuing earning capacity; the other may not necessarily recur.
This is why the most important question arising from these accounts is not whether NNPCL made ₦7.2 trillion. It is whether the quality and sustainability of that profit justify confidence that comparable performance can be repeated.
There are encouraging signs that the underlying business itself is strengthening. Oil and condensate production increased five per cent to 565.8 million barrels during the year, while NNPCL’s equity share increased 11 per cent. Natural gas production rose nine per cent to 2,606.2 billion standard cubic feet, with NNPCL’s equity share similarly increasing 11 per cent.
There is another reason transparency matters. NNPCL’s own December 2025 monthly report presented provisional groupwide revenue of ₦60.517 trillion and profit after tax of ₦5.760 trillion for January to December. The audited accounts subsequently report revenue of ₦34.5 trillion and profit after tax of ₦7.2 trillion. Crucially, the monthly report expressly warned that its figures were provisional and subject to reconciliation and that its revenue figure represented aggregate groupwide revenues including intercompany transactions. That goes a considerable way towards explaining why it should not simply be compared with consolidated audited revenue. But the scale of the reconciliation illustrates why clear explanations accompanying the numbers are indispensable.
The refineries remain another test of transformation. Nigerians have watched enormous resources committed over decades to Port Harcourt, Warri and Kaduna without receiving sustainable refining performance in return. If NNPCL’s new philosophy is genuinely commercial, the era in which refinery expenditure could continue without measurable returns must end. Assets must ultimately justify the capital invested in them.
I came away from Friday’s engagement persuaded that something consequential may indeed be changing at NNPCL. Increased production, stronger cash generation, substantial dividends and a more aggressive gas strategy deserve acknowledgement. The company’s ambition to mobilise $60 billion in investment by 2030 while raising crude production to three million barrels per day and gas production to 12 billion standard cubic feet per day is equally significant.
But transformation carries its own burden of proof. The more NNPCL asks Nigerians to see it differently, the more transparent it must become about the numbers by which that transformation is measured. Transparency should mean more than publishing audited accounts. It should mean making the movement of value sufficiently clear for the ordinary shareholder, the Nigerian citizen, to understand.
NNPCL’s ₦7.2 trillion profit should therefore provoke neither reflexive cynicism nor uncritical celebration. Give credit for higher production, improved cash generation and stronger profitability. But ask what portion of the earnings is recurring. Demand commercial discipline from the refineries. Follow the investment in gas infrastructure to actual gas delivered to industries and power plants. And insist that today’s impressive numbers become tomorrow’s sustainable performance.
NNPCL’s 2025 report gives Nigerians reason for cautious optimism. The real test is whether this performance can endure. That is when transformation becomes more than a promise. It becomes a record.
Lemmy Ughegbe, Ph.D, FIMC, CMC
Email: lemmyughegbeofficial@gmail.com
WhatsApp ONLY: +2348069716645
