NNPC profit slumps N256bn to N279bn as July oil output, sales fall

The Nigerian National Petroleum Company Limited (NNPC Ltd) suffered a sharp reversal in earnings in July, with profit after tax plunging 47.9 per cent to N279 billion, while revenue fell by almost N1.3 trillion as crude and gas production and petroleum sales weakened.

The July performance, contained in the company’s Monthly Report Summary, represents a decline of N256 billion from the N535 billion profit recorded in June, when earnings reached their highest monthly level since August 2025.

NNPC’s revenue also dropped 29.7 per cent month-on-month to N3.087 trillion, from N4.39 trillion in June, reflecting the combined effect of weaker production and lower sales volumes.

The July profit was the company’s lowest monthly PAT since March 2026, when it recorded N276 billion.

The decline came as crude oil and condensate production slipped to an average 1.68 million barrels per day in July, down from 1.72 million bpd in June.

That represents a 2.3 per cent month-on-month reduction, with NNPC attributing the decline to facility outages, equipment unavailability, pipeline incidents and other production constraints across several assets.

Natural gas production also weakened, falling 4.5 per cent to 7,489 million standard cubic feet per day, from 7,841 mmscf/d in June.

The bigger pressure came from crude sales.

NNPC said crude oil and condensate sales fell to 22.53 million barrels in July, compared with 28.23 million barrels in June, a decline of about 20.2 per cent in one month.

Gas sales also declined, falling to 4,581 mmscf/d from 4,970 mmscf/d.

The July numbers therefore reveal a significant mismatch between Nigeria’s improving second-quarter oil production and the financial performance of its national oil company entering the third quarter.

NNPC’s profit had risen sharply from N462 billion in May to N535 billion in June, but the July collapse reversed much of that improvement.

The company’s earnings have remained highly volatile over the past year. PAT fell 79.6 per cent to N185 billion in July 2025, before rebounding to N539 billion in August. It subsequently moved through N216 billion in September, N447 billion in October, N502 billion in November and N351 billion in December.

In 2026, profit reached N385 billion in January, collapsed to N136 billion in February, and then recovered through N276 billion in March, N481 billion in April, N462 billion in May and N535 billion in June before falling back to N279 billion in July.

Despite the latest decline, July profit remained N143 billion above February’s N136 billion, which remains the lowest monthly PAT reported by NNPC this year.

The company’s statutory contribution to government finances, however, continued to increase.

Cumulative statutory payments to the Federation rose to N7.913 trillion between January and July, up from N6.286 trillion through June.

That means NNPC paid an additional N1.627 trillion to the Federation in July alone, underscoring the company’s continuing importance to government finances even amid weaker monthly profitability.

NNPC said it was responding to the production challenges with measures designed to improve facility uptime and minimise unplanned downtime.

The company identified preventive maintenance, optimisation of export operations at FEPL and Nembe EP, incremental production opportunities across its portfolio, restoration of barging operations at Obodo and tandem offloading at Akpo and Erha among the measures being pursued.

The July performance is significant because it follows a relatively stronger second quarter for Nigeria’s oil industry.

According to the National Bureau of Statistics, the oil sector grew 7.31 per cent year-on-year in Q2 2026, up sharply from 2.57 per cent in Q1, although still far below the 20.46 per cent recorded in Q2 2025.

On a quarter-on-quarter basis, the sector expanded 10.91 per cent, while its contribution to real GDP rose to 4.16 per cent, from 4.05 per cent a year earlier and 3.92 per cent in Q1.

Nigeria’s overall economy also grew 4.43 per cent in real terms in Q2, compared with 4.23 per cent in the same quarter of 2025.

The divergence between stronger quarterly oil-sector growth and NNPC’s weaker July earnings highlights the sensitivity of the petroleum business to production reliability, sales volumes and asset availability.

For government, the immediate concern is broader than NNPC’s profit.

Oil remains a critical source of public revenue and foreign exchange, meaning prolonged production disruptions could affect government finances, external liquidity and the broader economy.

NNPC’s July numbers therefore provide an early warning for Q3: Nigeria entered the quarter with stronger oil-sector growth, but its national oil company is already confronting falling output, a 20.2 per cent drop in crude sales and a N256 billion monthly profit erosion.