NNPC Cuts Costs, Saves $3.4bn via Contract Restructuring

By Adedapo Adesanya

The Nigerian National Petroleum Company (NNPC) Limited has saved $3.4 billion through a comprehensive contract restructuring and optimisation programme, according to its chief executive, Mr Bayo Ojulari.

This marks one of the company’s most significant efficiency gains since its transition into a commercially driven entity under the Petroleum Industry Act, PIA.

The state oil company’s head disclosed this while presenting the company’s one-year performance scorecard at the opening of the 25th NOG Energy Week in Abuja, where he outlined improvements in production, revenue generation, operational efficiency and investor confidence.

According to Mr Ojulari, the contract review programme eliminated operational waste, strengthened commercial discipline and lowered costs without disrupting production, demonstrating that efficiency-driven reforms can deliver stronger financial returns while enhancing competitiveness.

He said the company’s operational performance improved significantly over the past year, with crude oil production rising by six per cent to 569.7 million barrels, while gas production increased 8.1 per cent to 2.576 trillion standard cubic feet.

He revealed that government revenue generated by the company also climbed 21.8 per cent to N19.5 trillion during the review period.

Mr Ojulari disclosed that Nigeria’s crude oil production has increased to about 1.71 million barrels per day, the highest level recorded in five years, while NNPC Exploration and Production Limited (NEPL) achieved a record output of 365,000 barrels per day.

He reaffirmed the company’s production targets of two million barrels per day by 2027 and three million barrels per day by 2030, alongside plans to increase gas production from the current 7.62 billion cubic feet per day to 10 billion cubic feet by 2027 and 12 billion cubic feet by 2030.

The NNPC helmsman attributed the stronger production performance to improved operational stability, enhanced security and the restoration of critical oil infrastructure across the Niger Delta.

He revealed that Nigeria’s major crude export terminals achieved an average 98 per cent operational recovery between April 2025 and May 2026, a sharp turnaround from the severe disruptions experienced in 2022.

He added that key evacuation pipelines, including the Trans Niger Pipeline, Trans Escravos Pipeline, Trans Ramos Pipeline, Trans Forcados Pipeline and the Oando-Brass Pipeline, are now operating at full availability, significantly improving crude evacuation and boosting confidence among producers and investors.

Mr Ojulari also announced that NNPC maintained 100 per cent compliance with all Joint Venture (JV) cash-call obligations throughout 2025 and into June 2026, describing the achievement as a critical factor in sustaining investor confidence and preventing project delays.

However, he noted that while NNPC fulfilled all its funding commitments, some JV partners remained in default, increasing the company’s financial burden in several operations.

Beyond production, NNPC recorded major commercial milestones, including the execution of long-term Gas Sale and Purchase Agreements (GSPAs) covering 1.29 billion standard cubic feet per day of LNG feed gas and an additional 750 million standard cubic feet per day for domestic industrial gas supply to DFL FZE and the Dangote Refinery.

The company said the agreements are expected to unlock more than $20 billion in associated investments, with seven additional commercial transactions currently under negotiation.

Mr Ojulari further highlighted governance reforms introduced over the past year, including the resumption of monthly remittances to the Federation Account from July 2025, the restoration of monthly business performance reporting and the company’s first earnings call in November 2025, measures aimed at strengthening transparency and investor confidence.

Addressing industry stakeholders, Ojulari urged African governments, financiers, regulators and energy companies to deepen strategic partnerships to unlock the continent’s vast energy resources.

He observed that despite holding about 17 per cent of global natural gas reserves, Africa continues to attract only a small share of global energy investment, stressing that stronger collaboration across the public and private sectors will be essential to drive industrialisation, improve energy security and maximise long-term value from the continent’s natural resources.