The Nigerian National Petroleum Company Limited recorded a sharp decline in profitability in July as lower crude oil sales and production disruptions affected its financial performance. According to the company’s July monthly report, NNPC’s profit after tax fell by 48 percent from N535 billion in June to N279 billion in July.
The decline came as crude oil sales dropped significantly to 21 million barrels during the month.The weaker performance was linked to several operational challenges across the company’s production assets. NNPC said facility outages, equipment shortages, pipeline incidents and other production constraints affected crude oil output during the period. The decline was not limited to crude oil sales. Gas sales also fell in July, dropping from 4,970 million standard cubic feet per day in June to 4,581 million standard cubic feet per day. At the same time, gas production slowed to 7,489 million standard cubic feet per day.
NNPC said it plans to improve production by keeping its facilities operating efficiently and reducing unexpected shutdowns. The company said its strategy would include stronger preventive maintenance programmes and measures aimed at improving the reliability of its key facilities. It also plans to improve export operations at FEPL and Nembe EP while developing additional production opportunities across its portfolio. Other measures include activating tandem offloading operations at Akpo and Erha. The move is expected to provide greater flexibility in crude oil exports. NNPC also plans to restore barging operations at Obodo to improve the movement of production and support higher output.
The decline in profit was accompanied by a significant fall in revenue. NNPC’s revenue dropped by 31.5 percent, from N4.38 trillion in June to N3 trillion in July. Despite the fall in revenue and profit, the company increased its statutory payments to the federation during the month. Payments rose from N1.43 trillion in June to N1.63 trillion in July. Between January and July, NNPC’s total statutory payments to the federation reached N7.91 trillion.
The increase in remittances followed the implementation of Executive Order 9, signed by President Bola Tinubu earlier this year. The directive removed NNPC’s previous ability to deduct certain funds from its revenue before making payments to the federation. Specifically, the order stopped the company from withholding the 30 percent Frontier Exploration Fund and 30 percent management fees at source. NNPC also provided updates on some of its major gas infrastructure projects.
On the Ajaokuta Kaduna Kano Gas Pipeline, the company said construction and installation activities had reached an advanced stage, with the project expected to support early gas delivery to Abuja in 2026. For the Obiafu Obrikom Oben Gas Pipeline, NNPC said pre commissioning activities for the River Niger crossing had been completed, paving the way for the delivery of first gas in August 2026.
The July performance highlights the effect that production disruptions and lower crude sales can have on NNPC’s earnings. While the company recorded weaker financial results, it is relying on improved facility maintenance, stronger export operations and additional production initiatives to support recovery in the coming months.
