The Nigerian National Petroleum Company Limited (NNPC Ltd) has announced a major reduction in its operating expenses, cutting costs by $3.4bn through contract restructuring and efficiency reforms aimed at improving profitability and strengthening Nigeria’s energy sector.
The company said the savings represent one of its most significant achievements since transitioning into a commercially focused entity under the Petroleum Industry Act, with the reforms designed to eliminate inefficiencies, improve contract management and deliver greater value to the Nigerian government and investors.
The Group Chief Executive Officer of NNPC Limited, Bayo Ojulari, disclosed the development on Tuesday during the presentation of the company’s one-year performance scorecard at the opening ceremony of the 25th NOG Energy Week in Abuja.
According to Ojulari, the cost reduction was achieved without disrupting operations, highlighting what he described as the importance of efficiency-driven reforms rather than increased spending.
He explained that the contract optimisation initiative helped the company reduce waste, enforce stronger commercial discipline and improve the competitiveness of Nigeria’s petroleum industry.
Presenting the scorecard, the NNPC chief executive revealed that the company recorded growth across several key areas, including crude oil production, gas output, government revenue generation, export terminal performance and corporate transparency.
He said crude oil production increased by six per cent to 569.7 million barrels year-on-year, while gas production climbed by 8.1 per cent to 2,576 billion standard cubic feet.
Government revenue contribution from the company also rose significantly, increasing by 21.8 per cent to N19.5tn during the review period.
“Our transformation is yielding measurable outcomes. We have achieved a six per cent increase in crude oil production, an 8.1 per cent increase in gas production, delivered N19.5tn in government take to the Federation, representing a 21.8 per cent increase, and successfully reduced costs by $3.4bn through contract restructuring and optimisation,” Ojulari said.
“These are not just numbers. They demonstrate that operational discipline, commercial efficiency and strategic reforms can simultaneously increase production, reduce costs and improve returns to the nation.”
The NNPC boss further disclosed that Nigeria’s crude oil production had risen to approximately 1.71 million barrels per day, representing the highest level recorded in five years.
He added that the NNPC Exploration and Production Limited achieved a record production level of 365,000 barrels per day, reflecting improved performance across the company’s upstream operations.
Ojulari said the company had set ambitious production targets, with plans to increase crude output to two million barrels per day by 2027 and three million barrels daily by 2030.
The company also projected a steady increase in gas production, with output expected to rise from about 7.62 billion cubic feet per day currently to 10 billion cubic feet daily in 2027 and 12 billion cubic feet per day by 2030.
He attributed the production improvements largely to increased operational stability, recovery of critical infrastructure and improved security around oil and gas assets.
Export Terminals Recover From Operational Challenges
Highlighting improvements in Nigeria’s crude evacuation system, Ojulari said the country’s export terminals achieved an average recovery factor of 98 per cent between April 2025 and May 2026.
He contrasted the performance with the severe operational challenges experienced at some facilities, including the Bonny Oil and Gas Terminal, which recorded performance levels as low as one per cent in June 2022.
“The journey from near-zero terminal performance to approximately 98 per cent recovery across our export terminals represents what can be achieved through collaboration, operational discipline and sustained investments in security and infrastructure,” he said.
“Today, all major evacuation pipelines are fully operational. The Trans Niger Pipeline, Trans Escravos Pipeline, Trans Ramos Pipeline, Trans Forcados Pipeline and the Oando-Brass line are all operating at 100 per cent availability.
“This level of reliability gives confidence to producers, investors and international buyers.”
NNPC Maintains JV Funding Commitment
Ojulari also disclosed that NNPC maintained full compliance with all Joint Venture cash-call obligations throughout 2025 and up to June 2026, describing the achievement as essential to sustaining investor confidence.
He noted that while NNPC had honoured its financial commitments, some Joint Venture partners were still experiencing funding challenges, resulting in additional responsibilities for the national oil company.
“Our commitment to our Joint Venture obligations remains absolute. We have sustained 100 per cent compliance because we understand that credibility and trust are fundamental to long-term partnerships,” he said.
“Our objective remains clear, to support the industry in achieving two million barrels of crude oil production per day while ensuring projects are not delayed because of funding constraints.”
Gas Deals Expected to Unlock $20bn Investment
Beyond production growth, the NNPC chief executive highlighted major commercial agreements signed within the year.
He said the company secured Gas Sale and Purchase Agreements covering 1.29 billion standard cubic feet per day of long-term LNG feed gas supply, as well as another agreement covering 750 million standard cubic feet daily for domestic industrial gas supply to DFL FZE and Dangote Refinery.
According to him, the agreements are expected to attract more than $20bn in investments, while seven additional commercial transactions are currently under negotiation.
He added that NNPC resumed full monthly remittances to the Federation Account in July 2025, restarted monthly business performance reporting and conducted its first earnings call in November 2025 as part of efforts to improve transparency and investor engagement.
Ojulari Calls for Stronger African Energy Partnerships
Speaking on Africa’s energy future, Ojulari urged governments, investors, regulators and industry operators to embrace stronger collaboration, warning that fragmented approaches could limit the continent’s ability to fully benefit from its natural resources.
He argued that Africa’s energy transformation would depend not only on its resources but also on the strength of partnerships created around investment, technology and industrial development.
“The future of African energy will not be determined solely by the resources beneath our soil, but by the quality of the partnerships we forge above it,” Ojulari said.
“At NNPC Limited, we see ourselves not just as an energy producer but as an ecosystem builder, connecting capital, technology, policy, talent and markets to create lasting value for Nigeria and Africa.
“We must move beyond transactional relationships to strategic partnerships; beyond isolated projects to integrated value chains; and beyond exporting raw resources to building competitive industrial economies. The opportunity before us is extraordinary. The responsibility is ours. And the time to act is now.”
He noted that although Africa holds about 17 per cent of global natural gas reserves alongside significant crude oil and renewable energy resources, the continent continues to attract only a limited share of global energy investments.
He stressed that closer cooperation among governments, national oil companies, financial institutions, technology providers, regulators and academic institutions would be necessary to unlock Africa’s energy potential.
NNPC’s Commercial Transformation Continues
Since becoming a fully incorporated company under the Petroleum Industry Act, NNPC Limited has pursued a commercial transformation strategy focused on improving efficiency, reducing costs, enhancing transparency and attracting new investment into Nigeria’s oil and gas sector.
The latest performance report comes as the Federal Government continues efforts to increase crude oil production, expand gas utilisation and improve investor confidence through sector reforms, infrastructure rehabilitation and stronger security measures.
Industry analysts say reducing operating costs remains crucial for Nigeria’s competitiveness as global energy companies increasingly prioritise projects with lower production costs and improved sustainability standards.
The 25th NOG Energy Week continues to serve as one of Africa’s leading energy gatherings, bringing together policymakers, investors, industry executives and energy experts to discuss the future of oil, gas, sustainability and industrial development across Nigeria and the continent.