The Nigerian National Petroleum Company Limited (NNPC Ltd) is undergoing a fundamental shift in the way it operates, moving from an organisation traditionally defined by its strategic national role to a commercially driven energy company focused on profitability, accountability and sustainable growth.

The shift is reflected in the company’s 2025 financial performance, which management says demonstrates the impact of tighter cost controls, stronger cash generation, improved collections and greater operational discipline.

NNPC recorded a profit after tax of N7.2tn in 2025, representing a 33 per cent increase from N5.4tn recorded in 2024.

The performance was achieved despite a 24 per cent decline in revenue to N34.5tn, underscoring the company’s argument that the improvement was driven less by revenue expansion than by changes in the quality and efficiency of its operations.

Taxes, royalties and other remittances to the Federal Government also rose by 39 per cent to N22.3tn, while earnings before interest, taxes, depreciation and amortisation increased to N18tn.

Operating cash flow rose to N12.8tn. For NNPC’s Group Chief Executive Officer, Bashir Bayo Ojulari, the significance of the figures lies in what they reveal about the company’s operating culture.

Presenting the audited 2025 results, Ojulari said profit increased from N5.4tn to N7.2tn while revenue fell to N34.5tn.

“Yet, profit grew because we improved the way we operate. And we maintained discipline across our businesses,” he said.

That explanation provides an important insight into NNPC’s new operating model.

The company is seeking to make cost discipline, accountability, productivity and profitability permanent features of its business rather than temporary responses to market conditions.

From Revenue To Value

The change is particularly significant because NNPC’s 2025 performance came against a challenging revenue environment.

Lower crude oil prices and reduced white-product volumes following changes in Nigeria’s domestic petroleum market put pressure on the company’s top line.

Yet, according to Group Chief Financial Officer, Segun Adedapo, NNPC was able to protect its margins by maintaining cost of sales at roughly the same proportion of revenue.

General and administrative expenses also declined, falling from eight per cent of revenue in 2024 to seven per cent in 2025.
The recovery of significant aged receivables provided another boost.

As funds owed to the company were recovered, provisions previously made against those receivables could be unwound, supporting the improvement in the bottom line. The significance of this development extends beyond the immediate financial result.

Under the commercial structure established by the Petroleum Industry Act, NNPC Ltd is expected to operate as a limited liability company, generate returns and meet its financial obligations.

The old assumption that government would automatically provide financial support to bridge gaps is therefore no longer the foundation of the business.

Adedapo described the new reality in stark terms: NNPC no longer has a “father or mother” to fall back on.
That has changed the way the company approaches money owed to it, expenditure, financing and investment.

The company must pursue receivables, manage costs and ensure that its businesses generate sufficient returns to sustain operations and support future investment.
The shift is also important to NNPC’s long-term ambition of becoming a publicly listed energy company. An organisation seeking access to public capital cannot rely solely on its strategic importance. It must demonstrate profitability, financial transparency, governance, predictable cash flows and operational performance.

The 2Es And 2Ps

At the centre of the new operating philosophy is what NNPC management describes as the “NNPC Way”, built around two Es and two Ps.

The first is Enterprise First. The principle requires employees and business units to put the interests of the organisation ahead of narrow departmental or individual interests.

The second is Execution Excellence, which focuses on delivering results, reducing waste and improving productivity.

The two Ps are Profitable Growth and Partner of Choice. Profitable Growth means every business must have a clear pathway towards sustainable returns rather than simply expanding its activities.

Partner of Choice reflects the company’s ambition to attract investors and business partners that can bring capital, technology, expertise and shared accountability.

Together, the four principles represent an attempt to change not only what NNPC does but how it does it.
Ojulari has repeatedly emphasised the importance of culture in determining whether the company’s strategic objectives can be achieved.

His warning that “culture eats strategy for breakfast” reflects the challenge facing an organisation as large and complex as NNPC.
The company may have ambitious targets for oil production, gas infrastructure, refining and investment, but management believes those targets can only be achieved if the workforce adopts a culture centred on execution and value creation.

Raising Oil And Gas Production

Financial discipline is only one component of NNPC’s strategy. The company is simultaneously seeking to increase oil and gas production significantly over the next four years. Crude oil and condensate production averaged 1.77 million barrels per day in 2025, the highest level in five years.
Natural gas production reached 7.2 billion standard cubic feet per day, a three-year high.

NNPC is targeting two million barrels per day by 2027 and three million barrels per day by 2030. It also aims to raise natural gas production to 12 billion standard cubic feet per day by 2030.

To support these ambitions, the company plans to mobilise about $60bn in upstream, midstream and downstream investments by 2030. The targets have implications beyond NNPC’s balance sheet.

Higher crude production would provide more feedstock for domestic refineries, increase export capacity and potentially strengthen foreign exchange earnings and government revenues.

Higher gas production, meanwhile, could support power generation, fertiliser production and industrial activity if the necessary infrastructure is available.

This is why NNPC’s investment strategy is increasingly being presented as an integrated oil and gas strategy rather than a series of individual projects.

Building The Gas Backbone

Gas infrastructure is a particularly important component of that strategy. Projects including the Ajaokuta-Kaduna-Kano pipeline, the Obiafu-Obrikom-Oben pipeline and the Escravos-Lagos Pipeline System are expected to expand the country’s ability to move gas from producing areas to consumers.

Ojulari said the River Niger crossing on the AKK pipeline had been completed and that the 40-inch, 623-kilometre mainline had reached full completion.

The company also commissioned the ANOH-OB3 Custody Transfer Metering Station, while the 300 million standard cubic feet per day ANOH Gas Processing Plant had advanced towards start-up readiness.

For NNPC, the commercial importance of these projects goes beyond transportation. A more reliable gas network could improve feedstock availability for power plants, fertiliser producers, manufacturers and other gas-based businesses.

In that sense, gas is being positioned not merely as another hydrocarbon but as an industrial development platform.

A New Approach To Refineries

Perhaps the clearest test of NNPC’s commercial philosophy is its strategy for Nigeria’s refineries. The company is moving away from an approach focused primarily on paying contractors to rehabilitate facilities.

Instead, it is seeking arrangements in which technical partners have an economic stake in the performance of the assets. That is the thinking behind the Technical Equity Partnership model.

Under the model, a technical partner would have an equity interest and therefore a direct financial incentive to ensure that a refinery remains efficient and commercially viable after rehabilitation.

The logic is that a contractor who completes a project and exits may have less incentive to ensure that the facility remains profitable over the long term. An equity partner, by contrast, shares both the risks and potential returns.

NNPC has also been assessing new technologies and operating practices that could improve refinery efficiency. More than 30 Chinese engineers spent months studying the Port Harcourt and Warri refineries as part of the process.

However, Ojulari said the engagement remained at the memorandum-of-understanding stage, with commercial and technical negotiations required before any final agreement. The objective, therefore, is not merely to restart the refineries.

The broader challenge is to create facilities that can process crude efficiently, manage operating costs and generate sustainable commercial returns.

People As A Business Asset

NNPC’s operating model also places considerable emphasis on its workforce. In 2025, the company employed 1,023 full-time employees, including more than 1,000 graduates who had completed a one-year internship and training programme before deployment.

The objective is described as a “talent-to-value” transformation.
Under this approach, employees are expected to contribute directly to the value generated by the organisation.

The company is also placing greater emphasis on technical competence, digital skills, international exposure and leadership development.

Gender representation is another part of the workforce strategy. Women now account for 23 per cent of leadership positions in NNPC, compared with an industry benchmark of 17 per cent, according to the company.

For the NNPC, the workforce transformation is necessary because the company’s ambitions require capabilities beyond traditional petroleum operations.

A commercially driven energy company needs professionals capable of managing complex projects, negotiating investment partnerships, accessing capital and operating across increasingly integrated energy markets.

Preparing For Capital Markets

The eventual IPO represents one of the most visible tests of NNPC’s commercial transformation. There is currently no fixed date for a listing.

Instead, management is focused on preparing the company to meet the requirements and expectations of the capital market. That includes strengthening financial reporting, governance, transparency, accountability and operational performance.
An IPO would represent more than a fundraising exercise. It would potentially subject NNPC to greater scrutiny from investors and the wider market, making its financial and operational performance increasingly important.

Ojulari has therefore framed the listing as a potential culmination of the commercialisation process rather than an immediate objective.
The company has embarked on a readiness assessment to identify gaps that must be addressed before it can meet the expectations of public-market investors
Another indication of the changing culture is NNPC’s relationship with financial institutions. Ojulari said the company had established more banking relationships in one year than it had developed during the preceding decade. It has also expanded access to short-term revolving facilities while working towards medium- and long-term financing.

The underlying objective is to build financial credibility.
For NNPC, becoming a “partner of choice” means convincing banks, investors, technical partners and other stakeholders that the company has the governance, financial discipline and operational capacity to deliver on its commitments.
The ultimate ambition, according to Ojulari, is to reach a stage where “capital should be looking for you” rather than NNPC constantly having to search for capital.

That ambition will depend heavily on whether the company can sustain the financial performance recorded in 2025.

NNPC’s N7.2tn profit is therefore both an achievement and a test.

The increase in profit despite lower revenue provides evidence that cost management, receivables recovery and operational efficiency can significantly affect the company’s financial performance. But sustaining that performance while increasing investment will be more difficult.
NNPC wants to raise oil production to three million barrels per day by 2030, increase gas output, complete major infrastructure projects, establish commercially viable refining operations, strengthen its workforce and prepare for a potential IPO. Each objective requires significant capital and effective execution. The company’s new operating model is intended to provide the framework for achieving them.

Enterprise First is designed to align the organisation around common objectives. Execution Excellence is expected to ensure that plans translate into measurable results. Profitable Growth is intended to prevent expansion without adequate returns. Partner of Choice is aimed at attracting the capital, technology and expertise required to execute projects at scale. Together, the principles represent a significant shift in the way NNPC defines success.

The company is no longer measuring itself solely by the volume of oil produced or the scale of its national obligations. It is increasingly measuring performance through profitability, cash generation, operational efficiency, investment, partnerships and the ability to create sustainable value. The next phase will determine whether the model can deliver consistently.

For NNPC, the challenge is no longer simply to demonstrate that it can produce a large profit in a single year. It is to build an organisation in which financial discipline becomes institutionalised, production growth becomes sustainable, projects generate returns and the company earns the confidence of investors and partners.

If those objectives are achieved, the N7.2tn profit could become more than a record financial result.

It could mark an important milestone in NNPC’s longer journey from a strategically important national petroleum company to a commercially disciplined and globally competitive energy business.

By Martins ADEBOLA, a financial analyst, writes from Abuja.`