The Nigerian National Petroleum Company (NNPC) Limited recorded a 35.4% decline in profit after tax to N2.28 trillion in the first half of 2026, compared with N3.53 trillion in the same period of 2025, according to the company's unaudited financial statements.
The drop represents a shortfall of N1.25 trillion year-on-year, as total revenue fell by 18.6% to N7.63 trillion from N9.38 trillion in H1 2025. The company attributed the downturn to lower crude oil production and reduced earnings from its upstream and gas operations.
Revenue and Production Decline
NNPC's revenue from crude oil sales dropped to N4.12 trillion in H1 2026, down from N5.46 trillion in the prior year. Gas revenue also fell to N1.08 trillion from N1.32 trillion, reflecting weaker global prices and operational challenges.
Crude oil production averaged 1.35 million barrels per day in the period, a decline from 1.48 million bpd in H1 2025, according to data from the Nigerian Upstream Petroleum Regulatory Commission. The company also faced higher finance costs, which rose to N310 billion from N240 billion, partly due to increased borrowing.
Impact on Government Revenue and Economy
The profit decline has significant implications for government finances, as NNPC remits dividends and taxes to the federation account. Analysts expect lower remittances in the second half of 2026, which could widen the fiscal deficit.
"The drop in NNPC's profitability reflects broader challenges in the oil sector, including production inefficiencies and global price volatility," said Dr. Adesina Fashola, an energy economist at the University of Lagos. "Unless production is ramped up, the government's revenue targets will be missed."
Strategic Response and Outlook
In response, NNPC has announced plans to increase production through enhanced security and partnerships with private operators. The company also aims to reduce costs and optimize its refining operations.
Despite the decline, NNPC remains the largest contributor to the federation account, accounting for about 60% of total revenue in 2025. The company's management remains optimistic about a rebound in the second half, citing improved security in the Niger Delta and ongoing asset rehabilitation.
