NNPC saves $3.4 billion through contract review, reports production gains

The Nigerian National Petroleum Company Limited (NNPC) has achieved significant cost savings, reducing its operating expenses by $3.4 billion through an aggressive contract restructuring and optimization program. This efficiency gain is highlighted as one of the company's most substantial since its transition to a commercially driven entity.

Bayo Ojulari, Group Chief Executive Officer of NNPC Limited, presented this achievement alongside a one-year performance scorecard at the 25th NOG Energy Week in Abuja. The cost-cutting measure was achieved without compromising operational output, underscoring NNPC's strategy to enhance efficiency and deliver value to the Federation and its investors.

Ojulari detailed that the contract optimization initiative has successfully eliminated waste, improved commercial discipline, and bolstered the competitiveness of Nigeria's petroleum sector. The scorecard also revealed a six percent year-on-year increase in crude oil production, reaching 569.7 million barrels, and an 8.1 percent rise in gas production to 2,576 billion standard cubic feet. Furthermore, NNPC's contribution to government revenue surged by 21.8 percent, totaling N19.5 trillion over the review period.

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Our transformation is yielding measurable outcomes. We have achieved a six percent increase in crude oil production, an 8.1 per cent increase in gas production, delivered N19.5tn in government take to the Federation, representing a 21.8 per cent increase, and successfully reduced costs by $3.4bn through contract restructuring and optimisation.

"Our transformation is yielding measurable outcomes," Ojulari stated. "These are not just numbers. They demonstrate that operational discipline, commercial efficiency and strategic reforms can simultaneously increase production, reduce costs and improve returns to the nation."

Nigeria's crude oil production has climbed to approximately 1.71 million barrels per day, its highest in five years. NNPC Exploration and Production Limited alone recorded a peak production of 365,000 barrels per day. The company aims to increase crude oil production to two million barrels per day by 2027 and three million barrels per day by 2030. Projections indicate total gas production will rise from about 7.62 billion cubic feet per day this year to 10 billion cubic feet daily in 2027 and 12 billion cubic feet per day by 2030. Ojulari attributed these production improvements to enhanced operational stability and infrastructure recovery across the nation's oil assets.

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These are not just numbers. They demonstrate that operational discipline, commercial efficiency and strategic reforms can simultaneously increase production, reduce costs and improve returns to the nation.