NNPC: People, discipline and strategy behind profit numbers

The N7.2tn profit recorded by the Nigerian National Petroleum Company Limited in 2025 may be the clearest evidence yet of a company undergoing fundamental reinvention. Behind the impressive numbers is a deliberate shift in how the national oil company manages its people, controls costs, recovers debts, deploys capital and pursues growth, a transformation aimed at turning NNPC into a more disciplined, commercially driven and globally competitive energy company.

That ambition is reflected in the numbers, but the numbers alone do not explain them.

NNPC Limited’s profit after tax rose by 33 percent from N5.4tn in 2024 to N7.2tn in 2025, even as revenue declined to N34.5tn amid lower crude oil prices and reduced white-product volumes following the deregulation of the downstream petroleum market.

Taxes, royalties and other remittances to government, however, rose by 39 percent to N22.3tn, while earnings per share increased to N35.90.

The unusual combination of weaker revenue and stronger profit provides the clearest window into the strategy now unfolding inside the company: do more with less, eliminate waste, recover money owed to the company, improve operational efficiency and make every part of the business increasingly accountable for the value it creates.

Group Chief Executive Officer, Bayo Ojulari, sees the 2025 performance not as an isolated financial achievement but as evidence of what a more disciplined organisation can deliver.

“Profit grew because we improved the way we operate, and we maintained discipline across our businesses,” Ojulari said.

That discipline is being reinforced by a deliberate focus on people.

More than 1,000 young professionals were recruited, trained and deployed across the company, while women now occupy more than 23 per cent of NNPC’s leadership positions, above the 17 percent global industry benchmark cited by the company.

For Ojulari, the connection between people and performance is straightforward.

“Our ambition depends on people as much as the oil wells and the pipelines,” he said.

That philosophy runs through what NNPC describes as “The NNPC Way”, a cultural transformation built around Enterprise First, Execution Excellence, Profitable Growth and Partner of Choice.

It is a strategy designed to change not only what NNPC does, but how it thinks about doing business.

And that change extends from the balance sheet to the refineries, from crude production to gas infrastructure, from workforce renewal to capital mobilisation, and ultimately to the company’s ambition to stand alongside the world’s leading national energy companies.

One of the less visible components of NNPC’s 2025 performance was the attempt to institutionalise cost consciousness across the organisation.

The company’s financial performance shows that profitability improved even as its top line came under pressure. The management attributed this partly to cost optimisation, recovery of outstanding receivables and improved operational efficiency.

According to the Group Chief Financial Officer, Segun Adedapo, the company maintained its cost of sales broadly at the same percentage of revenue as in the previous year, despite the significant decline in revenue.

More strikingly, general and administrative expenses were reduced by about a quarter.

The G&A ratio fell from eight percent of revenue in 2024 to seven percent in 2025, even as the revenue base itself declined.

For NNPC, the numbers point to a deliberate effort to remove inefficiencies rather than simply rely on higher crude prices or increased sales to improve profitability. Receivables recovery was another important component.

The company recovered significant long-standing debts, allowing it to unwind provisions made in earlier years and contributing to the improved bottom line.

The strategy reflects a fundamental shift in how NNPC sees its commercial obligations.

Ojulari explained that under the Petroleum Industry Act, the company can no longer operate with the expectation that government funding will automatically provide a safety net when customers fail to pay.

Companies that take NNPC’s crude or gas must therefore meet their obligations.

The message is simple: commercial discipline begins with collecting what is owed.

That is also central to the company’s ambition to become a publicly listed enterprise.

A company seeking to attract investors cannot demonstrate commercial credibility while letting receivables accumulate indefinitely or tolerating businesses with no clear path to profitability.

Ojulari described this as a mindset shift.

“NNPC is no longer a place where everybody thinks it is just government and everybody does not pay back,” he said in explaining the effect of the PIA on the company’s commercial culture.

The Petroleum Industry Act, therefore, is emerging as more than a legal framework for restructuring the oil industry. For NNPC management, it has become an enabler of financial discipline, corporate governance and commercial accountability.

But the transformation cannot be sustained through financial controls alone. NNPC’s management recognises that production targets, refinery performance and gas expansion ultimately depend on the people operating the assets.

That explains the emphasis on its Talent-to-Value programme.

More than 1,000 young professionals joined the company during the year and underwent a rigorous one-year internship and training programme before being deployed across the organisation.

The strategy combines the institutional knowledge of experienced professionals with the skills and technological orientation of younger employees.

Digital capabilities, artificial intelligence and exposure to international practices are increasingly being incorporated into the company’s workforce development strategy.

The gender dimension is also becoming more prominent.

Women now occupy more than 23 per cent of leadership positions in NNPC, compared with the 17 percent global industry benchmark the company cites.

For management, however, diversity is being presented as part of a broader performance strategy rather than simply a numerical target.

The objective is to create an organisation with the skills, judgement and leadership capacity required to execute a significantly larger business agenda.

“Our people delivered the 2025 result,” Ojulari said.

The statement captures the central proposition behind the transformation: oil wells, pipelines, refineries and other physical assets create potential value, but people determine whether that value is ultimately realised.

Perhaps nowhere is NNPC’s new philosophy more evident than in its approach to Nigeria’s troubled refineries.

For years, the rehabilitation of the country’s state-owned refineries was largely conceived around government-funded contracts.

The model produced substantial expenditure but failed to deliver the sustained operational performance expected from the facilities.

Ojulari’s management is attempting to break from that cycle through the Technical Equity Partnership model.

Under the proposed arrangement, prospective technical partners would not simply be paid to operate or maintain the refineries. They would have equity exposure and, consequently, a direct financial interest in ensuring that the assets operate efficiently and sustainably.

The distinction is crucial. Under a conventional arrangement, contractors may be paid for delivering a defined scope of work, regardless of whether the underlying business ultimately generates an acceptable return.

An equity partner, by contrast, has capital at risk and therefore has a commercial incentive to ensure that the refinery performs.

That is the logic behind NNPC’s new approach.

The company initially considered more than 50 potential partners before narrowing the field to about 20. The prospective partners then undertook extensive due diligence, including intrusive on-site inspections involving more than 30 senior technical experts.

The company said the process was designed to ensure that any eventual partner would have the technical capability, operational experience and commercial commitment required to build a sustainable refinery business.

Ojulari said one of the most important lessons from previous rehabilitation efforts was that the parties involved often lacked sufficient “skin in the game”.

NNPC carried much of the financial risk, while contractors did not necessarily have a direct stake in the long-term performance of the assets.

The proposed TEP model seeks to change that. Technology is also influencing the strategy.

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During a recent visit to China, Ojulari said he observed petrochemical facilities operating at levels significantly above their original nameplate capacity through bottleneck optimisation, technology deployment and operational monitoring.

Some facilities, he said, were operating at 120 percent and even 140 per cent of design capacity.

The lesson for Nigeria is that restarting a refinery is not enough.

The facilities must be modernised, optimised and integrated into a business model capable of generating sustainable returns.

That means efficiency, scale and integration with petrochemical operations will be critical.

“We are not going to embark on a refinery journey that will lead to lots of money,” Ojulari said, stressing that every investment must ultimately have a pathway to sustainable revenue.

The objective, therefore, is not simply to have Nigeria’s refineries working again.

It is to have them working profitably.

The refinery strategy is only one part of a much larger growth programme. NNPC has set a target to increase crude oil production to two million barrels per day by 2027 and three million barrels per day by 2030.

Natural gas production is expected to rise to 10 billion standard cubic feet per day by 2027 and 20 billion standard cubic feet per day by 2030.

Underpinning the targets is an ambition to mobilise more than $60bn in investment across the energy value chain.

The scale of the challenge becomes clearer when placed against current production.

Crude oil and condensate production reached a five-year high of 1.77 million barrels per day in 2025, while Nigerian gas supply reached a three-year high of 7.2 billion standard cubic feet per day.

Moving from 1.77 million barrels per day to three million barrels per day will require substantially more than improved field operations.

It will require capital, new drilling, infrastructure, security, efficient project execution and stronger partnerships with international oil companies and indigenous producers.

Projects such as Bonga Southwest are expected to contribute to the expansion, while Bonga North is already progressing following the final investment decision.

Ojulari also pointed to increased drilling activities by operators as another contributor to future production growth.

But the production target will require capacity across the entire oil and gas ecosystem.

Service companies must have the equipment, personnel and financing to support increased drilling activity. NNPC itself must have the organisational capacity to manage a larger project portfolio.

That is why the company is looking beyond its own balance sheet and considering strategic equity participation, portfolio rationalisation and partnerships to accelerate investment.

The logic is straightforward: NNPC cannot deliver the production targets alone.

The same growth philosophy is being applied to Nigeria’s gas sector. The completion of the Ajaokuta-Kaduna-Kano pipeline and the Obiafu-Obrikom-Oben pipeline represents a significant step in expanding the country’s gas infrastructure.

But for NNPC, the real measure of success will not be completing the pipelines.

It will be what happens after gas begins to flow.

The AKK pipeline is expected to connect gas supplies to power generation and industrial users across parts of northern Nigeria.

The OB3 pipeline, meanwhile, strengthens the connection between major gas supply sources and markets.

Ojulari emphasised that the objective is to see gas translate into jobs, industrial activity, investment and economic opportunities. That distinction is important. Infrastructure is an enabler. Economic activity is the outcome.

If the new gas infrastructure works as intended, it could support power generation, manufacturing, fertiliser production, petrochemicals and other gas-intensive industries.

The expansion of gas production to 20 billion standard cubic feet per day by 2030, therefore, forms part of a wider industrialisation strategy.

All these initiatives ultimately point towards the same destination: an NNPC that management believes should operate to global commercial standards.

Ojulari has repeatedly argued that NNPC should no longer think of itself merely as a Nigerian company whose fortunes are tied to government decisions.

His ambition is for the company to become a formidable, commercially focused, resilient and profitable global energy company.

That ambition is linked to the company’s preparations for a future listing.

NNPC has begun listing-readiness work across the group and its subsidiaries, starting with diagnostics to identify gaps that must be addressed.

The objective is to establish the transparency, governance, financial reporting and performance track record required of a company seeking to access the public capital market.

Importantly, however, no date has been fixed for an initial public offering.

Ojulari stressed that management’s responsibility is to prepare NNPC, while the ultimate decision on whether and when to list rests with the shareholders. The preparation itself is nevertheless significant.

A company preparing for a public listing must demonstrate sustainable earnings, strong governance, transparency and accountability. It must also convince investors that its performance is not dependent on temporary conditions.

That makes the 2025 audited results particularly important.

They provide a track record against which future performance can be measured. Ojulari also pointed to strengthening relationships with banks and increasing access to financing as signs that confidence in NNPC’s commercial transformation is improving.

The broader ambition is to reach the level of global national oil companies such as Saudi Aramco. For Ojulari, the objective is not merely to make NNPC larger.

It is to make it credible enough for investors and lenders to seek the company out.

“Capital should be looking for you, not you are looking for capital,” he said. That statement perhaps best captures the strategic ambition behind the transformation.

The transformation NNPC is pursuing is therefore larger than a financial statement. The N7.2 trillion profit demonstrates that the company can improve profitability even when revenue comes under pressure. But sustaining that performance while investing heavily in production, gas infrastructure, refineries and human capital will present a different challenge.

NNPC must simultaneously protect profitability, increase crude and gas output, make its refineries commercially sustainable, attract billions of dollars in investment and maintain the discipline that produced the 2025 result.

Its own numbers provide both evidence of progress and a higher benchmark. Crude production has improved. Gas supply has strengthened. Profit has risen. Government remittances have increased. Receivables are being recovered. Costs are being scrutinised. New talent is entering the organisation. The company is changing how it approaches partnerships and capital.

But the targets ahead are considerably larger. Three million barrels per day by 2030. Twenty billion standard cubic feet of gas per day. More than $60bn in investment. Commercially viable refineries. Greater transparency and listing readiness.

And, ultimately, an NNPC capable of competing with major global energy companies.

That makes the 2025 result less a conclusion than a test of a new corporate model. As Ojulari put it, strong performance raises the bar. “For us, having a good performance is not just easy. It means that the bar has been set one level higher. So, we now need to focus on building the capacity to deliver.”

The next phase will determine whether NNPC can convert financial strength into productive assets, stronger energy security, sustainable profitability and a globally competitive energy business.

The N7.2tn profit may have changed the conversation.

The real test is whether the people, discipline and strategy behind the number can sustain it and turn NNPC into the global energy company it says it wants to become.

Ebiye Tamuno, an investment analyst, writes from Port Harcourt