The Nigerian National Petroleum Company Limited has reported a $3.4 billion reduction in operating costs alongside a significant increase in crude oil production, highlighting what the company described as gains from contract restructuring, operational efficiency and improved infrastructure performance.
NNPC Group Chief Executive Officer, Bashir Bayo Ojulari, disclosed the figures while presenting the company's one-year performance scorecard at the 25th Nigeria Oil and Gas Energy Week in Abuja. He said the cost savings were achieved through contract restructuring and optimisation without slowing down operations.
According to Ojulari, NNPC recorded a six per cent year-on-year increase in crude oil production, reaching 569.7 million barrels during the review period. Gas production also increased by 8.1 per cent to 2,576 billion standard cubic feet.
The company said Nigeria's crude oil production had risen to approximately 1.71 million barrels per day, representing the highest level in five years. NNPC's exploration and production subsidiary also recorded production of about 365,000 barrels per day.
Ojulari attributed the production improvement largely to greater operational stability, recovery of infrastructure and measures aimed at tackling oil theft and pipeline sabotage.
NNPC has previously said national crude production increased from a low of about 960,000 barrels per day in 2022 to an average of 1.71 million barrels per day, with improved pipeline security playing a significant role in the recovery.
The company also reported a major improvement in the performance of Nigeria's crude export infrastructure. Average recovery across the country's five major export terminals stood at about 98 per cent between April 2025 and May 2026, compared with severe operational problems experienced at some terminals in previous years.
The improvement is significant for Nigeria because unreliable evacuation infrastructure has historically contributed to production losses, disruptions and reduced investor confidence in the country's oil industry.
Ojulari said major evacuation pipelines, including the Trans Niger Pipeline, Trans Escravos Pipeline, Trans Ramos Pipeline, Trans Forcados Pipeline and the Oando-Brass line, were operating at full availability at the time of his presentation.
Beyond production, NNPC reported that its contribution to government revenue increased by 21.8 per cent to ₦19.5 trillion during the review period.
The company also said it maintained full compliance with its joint-venture cash-call obligations throughout 2025 and into June 2026, describing the development as important to sustaining confidence among its partners and supporting project execution.
The cost reduction comes as Nigeria seeks to increase crude production and attract fresh investment into the petroleum sector. NNPC has set a target of reaching two million barrels per day by 2027 and three million barrels per day by 2030.
The company also expects gas production to expand substantially over the coming years, with a target of about 10 billion standard cubic feet per day by 2027 and 12 billion cubic feet per day by 2030.
NNPC's latest figures come amid wider reforms aimed at making Nigeria's petroleum industry more commercially competitive following the company's transition into a limited liability company under the Petroleum Industry Act.
The Federal Government has also been working to address other factors affecting investment in the sector. Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, disclosed during the same energy conference that the government had engaged PricewaterhouseCoopers to benchmark more than 270 fees, taxes and rents imposed on oil and gas operators.
The government says the exercise is intended to identify fiscal bottlenecks and improve Nigeria's competitiveness in attracting energy-sector investment.
The combination of higher production and lower operating costs could improve the economics of Nigeria's oil industry if the trend is sustained. Increased output would potentially raise government revenues and export earnings, while lower operating costs could improve the commercial viability of oil projects.
However, industry stakeholders have cautioned that higher crude production alone will not be sufficient to transform Nigeria's energy sector. Investment in gas, refining, petrochemicals and other areas of the value chain will also be necessary if the country is to capture more value from its natural resources.
For NNPC, the immediate challenge will be sustaining the production gains while keeping costs under control and ensuring that infrastructure remains reliable.
The company's latest performance therefore represents both a recovery from previous production difficulties and an indication of the scale of work still required to meet Nigeria's longer-term production ambitions.
If the current trajectory continues, NNPC's management expects higher production, improved infrastructure reliability and tighter cost controls to strengthen the company's contribution to the Nigerian economy.
No comments:
Post a Comment