Crude output slump weighs on NNPC as December profit falls 30%

THE Nigerian National Petroleum Company (NNPC) Limited ended 2025 on a weaker financial footing after a drop in crude oil production sharply reduced its earnings in December. The state energy firm reported a 30 percent decline in monthly profit, highlighting how operational disruptions and lower output continue to affect the company’s performance.

An analysis of NNPC’s December 2025 financial and operational report shows that profit after tax declined to N351 billion in December, compared with N502 billion in November. The steep fall followed a reduction in crude oil and condensate production, which slipped from 1.60 million barrels per day (mmbpd) in November to 1.54 mmbpd in December. The December production figure was the lowest recorded by the company throughout 2025, underlining the scale of the operational challenges it faced at year-end.

Gas production also experienced a marginal decline during the same period. Average daily gas output stood at 6.914 million standard cubic feet per day (mmscf/d) in December, down slightly from 6.968 mmscf/d recorded in November. Although the drop was modest, it further reflected the broader slowdown across the company’s upstream operations.

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NNPC attributed the lower output primarily to a mix of scheduled maintenance and unexpected facility shutdowns across key producing assets. In a statement, the company explained that December production performance was affected by “planned maintenance work at Stardeep-Agbami and Renaissance-Estuary Area (EA), as well as unplanned production facility outages.” These disruptions limited production capacity and restricted the volume of crude and gas available for sale.

Despite the setback in December, NNPC still delivered strong results for the full 2025 financial year. The company reported N60.51 trillion in total revenue for the year, supported by crude oil sales, gas exports, and downstream activities. Profit after tax for the year stood at N5.76 trillion, indicating that the company remained profitable overall, even as production challenges persisted.

The company also made substantial statutory contributions to public finances. In 2025, N14.70 trillion was paid into the federation account, reinforcing NNPC’s role as a major revenue source for the federal government, states, and local governments. These payments come at a time when Nigeria continues to rely heavily on oil and gas proceeds to support budgetary spending and foreign exchange inflows.

Beyond financial results, NNPC provided updates on its strategic gas infrastructure projects, which are expected to strengthen domestic energy supply and reduce dependence on imported fuels. The Ajaokuta–Kaduna–Kano (AKK) Natural Gas Pipeline, one of the country’s flagship gas transmission projects, has reached 99 percent completion. According to the company, the mainline welding works have been successfully concluded as scheduled, while efforts are now focused on completing the Instrumentation and Process Systems (IPS) and Block Valve Stations (BVS) to enable final commissioning.

Similarly, the Obiafu-Obrikom-Oben (OB3) Gas Pipeline is nearing completion, with progress currently at 96 percent. NNPC stated that the River Niger crossing section of the project has completed all early works, and pilot hole drilling has commenced. The company added that the project remains on track for completion within the planned timeline.

The OB3 and AKK pipelines are central to Nigeria’s gas expansion strategy, as they are designed to transport large volumes of natural gas from the southern producing fields to industrial hubs in the north. Once fully operational, the pipelines are expected to support power generation, boost manufacturing, and improve energy access across the country.

While the strong full-year numbers demonstrate NNPC’s revenue-generating capacity, the sharp drop in December profit highlights how vulnerable the company remains to production disruptions. Analysts say stabilising output, improving infrastructure reliability, and reducing downtime at key facilities will be crucial for sustaining profitability in the months ahead.