The audited statements inform a narrative of transformation, argues UCHE JOE UWALEKE
The publication of NNPC Limited’s 2025 Audited Financial Statements (AFS) represents one other necessary milestone within the transformation of Nigeria’s nationwide oil firm from the opaque establishment it was extensively perceived to be for many years right into a commercially oriented, more and more clear and accountable vitality firm. More importantly, the accounts present proof of a enterprise that’s enhancing its operational efficiency, strengthening its earnings capability, producing extra cash and step by step repositioning its portfolio in the direction of higher-quality income streams. The resolution by NNPC Limited’s administration to publish its audited monetary statements on schedule and subsequently have interaction overtly with the media, analysts and different stakeholders deserves commendation. This is especially vital for a corporation of NNPC’s measurement and strategic significance to the Nigerian economic system.
The credibility of the 2025 accounts is additional strengthened by the unbiased audit performed by PricewaterhouseCoopers (PwC), one of many world’s main skilled providers companies. PwC issued an unmodified audit opinion on each the consolidated and separate monetary statements, concluding that the monetary statements pretty current the monetary place, monetary efficiency and money flows of the Group and the Company in accordance with the relevant monetary reporting framework. An unmodified opinion is just not, and shouldn’t be interpreted as, a certification that each facet of the corporate’s operations is environment friendly or that each administration resolution is perfect. It does, nonetheless, present necessary assurance that the monetary statements have been subjected to an unbiased audit and that, within the auditor’s skilled opinion, they pretty current the corporate’s monetary place and efficiency.
The headline monetary efficiency is especially spectacular when thought-about towards the tough income surroundings through which it was achieved. Profit after tax elevated by about 33 % from 5.4 trillion in 2024 to 7.2 trillion in 2025, whereas earnings per share rose by about 32 % to 35.9. EBITDA elevated by 22 % to 18 trillion and internet money generated from working actions rose by about 16.5 % from 11 trillion to 12.8 trillion. The firm additionally declared a 5.8 trillion dividend, representing a 35 % improve over the earlier yr. These are vital numbers, significantly as a result of they had been achieved regardless of a considerable decline in income.
Revenue fell by circa 24 % to 34.5 trillion, principally due to decrease crude oil costs and lowered white petroleum product volumes following the deregulation of the downstream petrol market. The decline in white-product income is necessary as a result of deregulation basically modified the economics and construction of NNPC Limited’s downstream enterprise. While the reform was painful from a top-line income perspective, it has additionally helped to enhance the standard of the corporate’s earnings by decreasing its dependence on the lower-margin and subsidy-linked petrol enterprise and rising the relative contribution of crude oil, pure fuel, LNG and different commercially pushed actions. Crude oil and pure fuel now account for roughly 91 % of income, in contrast with 77 % in 2024, demonstrating a major shift in portfolio composition.
What makes the 2025 efficiency significantly noteworthy is that prices declined alongside income, however at a tempo that allowed margins and earnings to enhance. Cost of gross sales fell by 24.6 % from 33.36 trillion to 25.14 trillion, common and administrative bills declined by about 27.6 % from 3.58 trillion to 2.59 trillion, whereas promoting and distribution bills fell dramatically from 145.7 billion to 33.1 billion. Consequently, gross revenue margin improved from 26 % to 27.2 %, whereas common and administrative bills additionally declined as a proportion of income. The figures subsequently present stronger proof of value self-discipline than merely wanting on the absolute measurement of the corporate’s value base.
This distinction is necessary in assessing the criticism surrounding NNPC Limited’s reported complete prices of 27.76 trillion. It could be deceptive to characterize this whole quantity as administrative overhead or discretionary expenditure. About 91 % of the overall represents value of gross sales, whereas solely about 33.1 billion pertains to promoting and distribution and a pair of.59 trillion to common and administrative bills. For an built-in vitality firm, value of gross sales naturally contains the prices immediately related to producing, buying and promoting oil, fuel and petroleum merchandise. The 2025 accounts disclose, amongst different gadgets, 4.66 trillion in royalties, 4.15 trillion in direct properly bills, 2.79 trillion in crude oil purchases, 1.86 trillion in fuel purchases and 1.79 trillion in petroleum merchandise.
The 3.71 trillion depreciation cost on oil and fuel properties additionally deserves to be correctly understood. Depreciation is a real accounting expense as a result of it acknowledges the consumption of the financial advantages of long-lived belongings over their helpful lives, however it isn’t a 3.71 trillion money fee made by NNPC Limited throughout 2025. Treating the whole depreciation cost as if it represented money expenditure throughout the yr would subsequently distort the interpretation of the accounts. At the identical time, statutory funds reminiscent of royalties and the NDDC levy ought to be distinguished from controllable working prices, whereas bills reminiscent of gas-flaring fees deserve scrutiny as a result of they will mirror operational inefficiencies and avoidable financial losses. Proper evaluation ought to subsequently distinguish statutory obligations, accounting fees, commodity procurement prices, manufacturing prices and genuinely controllable expenditure.
The stronger earnings efficiency was accompanied by equally encouraging operational outcomes. Crude oil and condensate manufacturing reached a mean of 1.77 million barrels per day, representing the best stage in 5 years, whereas pure fuel manufacturing reached 7.2 billion commonplace cubic toes per day, the best in three years. Total oil and condensate manufacturing elevated to 565.8 million barrels, whereas NNPC Limited’s fairness share elevated by 11 % to 223.7 million barrels. Its fairness share of fuel manufacturing equally elevated by 11 % to 1,154.9 billion commonplace cubic toes. The report efficiency of NNPC Exploration and Production Limited, which reached 355,000 barrels per day, is one other indication that the operational enhancements are more and more translating into tangible manufacturing beneficial properties.
The enchancment in manufacturing can’t be divorced from the corporate’s efforts to strengthen the reliability of its infrastructure and deal with the safety challenges which have traditionally constrained Nigeria’s oil manufacturing. The reported common terminal restoration price of 98 % between April 2025 and May 2026, in contrast with operational lows of 1 % at Bonny in 2022, illustrates the size of the advance in operational reliability. A terminal with a excessive restoration price permits a a lot larger proportion of the oil coming into the system to be efficiently dealt with and evacuated, thereby decreasing losses and disruptions and creating the infrastructure reliability required to extend manufacturing volumes. In easy phrases, having oil underground is just not sufficient; Nigeria should additionally be capable of safely and reliably transfer it by pipelines and terminals and finally promote it.
The progress on fuel infrastructure is equally vital. The completion of the River Niger crossing on the Ajaokuta-Kaduna-Kano pipeline and the reported completion of the 40-inch by 623-kilometre AKK mainline symbolize necessary steps in the direction of increasing Nigeria’s capacity to move fuel to demand centres. The commissioning of the ANOH-OB3 Custody Transfer Metering Station and progress in the direction of start-up readiness of the 300 MMscfd ANOH Gas Processing Plant are additionally necessary developments. These tasks are usually not merely engineering achievements; they’re items of infrastructure able to changing Nigeria’s considerable fuel assets into commercially priceless vitality, industrial feedstock and authorities income.
The strengthening of the corporate’s human capital is one other noteworthy growth. The firm has disclosed that greater than 1,000 younger professionals accomplished a rigorous one-year internship and coaching programme earlier than being deployed throughout the corporate, an initiative that has been known as the “1,000 Tigers” and varieties a part of NNPC Limited’s Talent-to-Value transformation. For an organization in search of to extend oil manufacturing, broaden fuel monetization, develop midstream infrastructure and create a extra commercially aggressive downstream enterprise, the standard of its workforce will finally be as necessary as the standard of its bodily belongings. The reported improve in ladies’s illustration in management positions to 23 %, in contrast with an trade common of 17 %, additionally signifies progress in creating a extra various management construction.
Perhaps probably the most misunderstood merchandise within the 2025 accounts is the 11.2 trillion reported as different receivables from the Federation. It is necessary to make a basic accounting distinction: this can be a balance-sheet receivable, not 11.2 trillion of recent safety expenditure incurred in 2025. In easy phrases, a receivable represents cash or worth that NNPC Limited says is owed to it. The firm explains that the 11.2 trillion includes 8.67 trillion of energy-security receivables and a pair of.53 trillion of different advances and receivables from the Federation.
The background to this steadiness goes again to the earlier yr. The 2024 accounts contained an energy-security value steadiness of 8.67 trillion at year-end, after NNPC Limited had recognised roughly 7.13 trillion of energy-security expense throughout 2024. These prices associated to the accredited framework beneath which NNPC Limited might incur sure prices related to defending nationwide oil and fuel infrastructure and subsequently get well these prices from the Federation. The necessary level is that the 8.67 trillion was not a brand new 2025 expense.
NNPC Limited has said that no energy-security expense was recognised throughout 2025 and that, following a reconciliation with the related authorities companies, the energy-security value receivables had been netted towards royalties, taxes and dividends due as at December 2024. The reconciliation was concluded in September 2025. In accounting phrases, netting signifies that as an alternative of 1 occasion paying the opposite after which receiving a refund, mutually acknowledged quantities could be offset.
This clarification is necessary as a result of the 11.2 trillion shouldn’t be interpreted as proof that NNPC Limited out of the blue spent 11.2 trillion on safety throughout 2025. The determine represents a balance-sheet receivable comprising cumulative quantities because of the firm in respect of prices and advances incurred on behalf of the Federation, topic to the reconciliation and settlement preparations described by administration. The proven fact that the steadiness was audited and reconciled with the related authorities companies additional reinforces the significance of analyzing the accounting substance relatively than counting on the headline determine.
Nevertheless, the controversy surrounding the 11.2 trillion gives NNPC Limited with a possibility to enhance an already enhancing disclosure tradition. Given the large public curiosity in government-related receivables and energy-security expenditure, future monetary statements would profit from a extra detailed motion schedule displaying the opening steadiness, additions throughout the yr, quantities settled in money, quantities offset towards taxes, royalties and dividends, foreign-exchange actions, reclassifications and the closing steadiness. Similar extra disclosure ought to be thought-about for every other materials merchandise that’s prone to appeal to vital public scrutiny. Greater granularity wouldn’t essentially point out a weak point within the accounts; relatively, it might cut back the scope for misinterpretation and strengthen public confidence within the monetary statements.
The broader story rising from the 2025 accounts is subsequently significantly extra constructive than the headline decline in income would possibly recommend. Revenue fell, however revenue elevated by one-third; value of gross sales declined by roughly one-quarter; administrative bills fell by greater than one-quarter; working money circulation elevated by 16.5 %; manufacturing reached multi-year highs; the corporate’s fairness volumes elevated; internet debt reportedly declined by 28 % to fifteen.9 trillion; internet belongings elevated by 15 % to 44.8 trillion; and the dividend elevated to five.8 trillion. These are significant indicators of a enterprise whose monetary efficiency is changing into much less depending on merely rising the highest line.
The transformation also needs to be seen inside the historic context of the Petroleum Industry Act 2021. For a lot of its existence since its institution in 1977, NNPC was extensively perceived as an opaque establishment, significantly due to the complexity surrounding its business actions, authorities relationships, subsidy preparations, remittances and monetary reporting. The conversion into NNPC Limited beneath the PIA basically modified its authorized and business framework and created a possibility to function on a extra clear and commercially accountable foundation. The enchancment in monetary reporting since 2022, culminating within the well timed publication of the 2025 audited accounts and direct engagement with analysts and the media, represents a major cultural change that ought to be acknowledged and inspired.
The present administration deserves credit score for this progress. Publishing audited accounts on schedule, conducting earnings calls, offering detailed explanations of economic efficiency and responding publicly to criticisms are practices that ought to change into institutionalized relatively than depending on the personalities of particular person executives. The CEO’s willingness to debate each achievements and remaining weaknesses, together with the acknowledgement that NNPC Limited is just not but the place it must be in unit working prices and refinery efficiency, is especially encouraging. Transparency turns into significant when administration is ready not solely to focus on beneficial numbers but additionally to acknowledge areas requiring additional enchancment.
The firm’s ambitions, nonetheless, are substantial and would require far more than an excellent set of economic statements. The targets of two million barrels per day of crude oil manufacturing by 2027 and three million barrels per day by 2030, alongside fuel manufacturing of 10 billion commonplace cubic toes per day by 2027 and 12 billion by 2030, would require sustained funding, infrastructure reliability, safety, technical functionality and entry to capital. The deliberate mobilization of $60 billion throughout the vitality worth chain by 2030 subsequently represents each a possibility and a formidable execution problem. Meeting these targets would be the final check of whether or not the operational transformation evident in 2025 could be sustained over a number of years.
The identical precept applies to the refineries. The Technical Equity Partnership mannequin and the MoU signed in April 2026 with potential Chinese companions present a probably extra commercially disciplined strategy to finishing and working the Port Harcourt and Warri refineries. However, the general public ought to decide this initiative by definitive agreements, capital commitments, rehabilitation milestones, working efficiency and business returns relatively than bulletins alone. Management’s said dedication to not repeat cycles of bulletins with out supply is subsequently welcome.
There can also be a broader governance alternative that NNPC Limited ought to seize because it continues its transformation. The firm’s said ambition to change into globally aggressive ought to finally embrace a clearly articulated programme for its proposed itemizing on the Nigerian Exchange. Rather than treating a future itemizing merely as an occasion, NNPC Limited might develop a clear, multi-year listing-readiness programme with measurable milestones protecting monetary reporting, company governance, board independence, disclosure requirements, audited monetary historical past, subsidiary restructuring, investor relations, dividend coverage, capital construction and different necessities obligatory for a profitable public providing.
The expertise of Saudi Aramco gives a helpful benchmark on this regard. Saudi Aramco’s eventual itemizing on the Tadawul was preceded by a protracted technique of getting ready the corporate, strengthening disclosure, establishing governance constructions and positioning the enterprise for public-market scrutiny. NNPC Limited needn’t replicate Saudi Aramco’s mannequin as a result of Nigeria’s institutional, fiscal and capital-market circumstances are completely different, however it will possibly draw an necessary lesson from it: a profitable itemizing is the fruits of years of institutional preparation, not merely the choice to promote shares. A printed NNPC Limited listing-readiness roadmap, with annual targets and publicly reported progress, would offer traders and Nigerians with a further measure of accountability.
Overall, NNPC Limited’s 2025 Audited Financial Statements ought to be thought to be a robust and inspiring set of outcomes. The firm elevated revenue considerably regardless of a serious fall in income, generated extra working money, lowered its main value classes, improved its margins, elevated manufacturing, strengthened its steadiness sheet and declared a considerably increased dividend. More importantly, the operational enhancements recommend that the monetary efficiency is being supported by actual adjustments in manufacturing, infrastructure reliability, fuel growth and organizational functionality.
The accounts don’t set up that each facet of NNPC Limited is environment friendly, nor ought to they protect the corporate from respectable scrutiny. A world-class nationwide vitality firm should be ready to elucidate its prices, authorities receivables, capital allocation, safety expenditure, refinery investments and returns with rising ranges of precision. But scrutiny ought to be primarily based on the substance of the accounts relatively than headline numbers taken out of context. On that foundation, the 2025 outcomes present appreciable proof that NNPC Limited is shifting in the best path.
The most encouraging facet of the 2025 efficiency is subsequently not merely the ₦7.2 trillion revenue. It is the mixture of stronger earnings, stronger money technology, increased manufacturing, improved infrastructure reliability, a extra resilient portfolio and more and more clear reporting. NNPC Limited has moved a substantial distance from the establishment Nigerians knew for many years. The activity now’s to institutionalize these beneficial properties, deepen disclosure, strengthen governance, execute the bold funding programme and finally show that the transformation can produce sustained worth for shareholders, the Federal Government and, most significantly, the Nigerian individuals.
Prof Uwaleke FCMA is Director of the Nasarawa State University Institute of Capital Market Studies and President of the Capital Market Academics of Nigeria
