• Posts decreasing sales volumes during high price cycle

Frank Okon

The Nigerian National Petroleum Company (NNPC) Limited remitted N2.89 trillion into the federation account in the first quarter of 2026, underlining its continued role as the backbone of government revenue and foreign exchange earnings.

The national oil company disclosed this in its latest operational and financial update, where it also reported improved performance driven largely by stronger gas output and operational efficiency, despite persistent infrastructure challenges.

According to the report, NNPC recorded a profit after tax of N276 billion in March, representing a sharp month-on-month increase of about 103 percent. Revenue for the same period rose to N2.77 trillion, up 3.51 percent from February, reflecting steady financial momentum.

The company attributed the performance to gains in production, particularly in the gas segment, as well as improved operational execution across key assets.

Gas production stood out as the strongest growth driver, rising consistently through the quarter from 7,281 million standard cubic feet per day in January to 7,458 mmscf/d in February, before reaching 7,731 mmscf/d in March, the highest level recorded in the past 12 months.

Crude oil and condensate production also showed modest improvement, increasing to 1.56 million barrels per day in March from 1.51 million barrels per day in January, although output remained largely flat compared to February.

NNPC said the gains were supported by operational efficiency, particularly offshore, citing the early completion of turnaround maintenance at the Bonga field under OML 118, which was delivered 12 days ahead of schedule.

However, the company acknowledged that pipeline disruptions continued to weigh on overall output and sales.

A major setback was the outage of the Trans Forcados Pipeline due to a leak at the Keremor axis, a situation that led to production curtailments across several assets between February 20 and March 25.

The challenges were reflected in crude oil sales, which declined significantly to 17.37 million barrels in March, down from 22.85 million barrels in February and 25.75 million barrels in January. Decreasing market supply point to prevailing evacuation and logistics constraints.

In response to the situation, NNPC stated that it is implementing targeted recovery measures aimed at improving asset reliability, resolving transportation bottlenecks, and stabilizing production levels.

“NNPC Limited continues to strengthen production resilience by executing restoration plans focused on improving asset reliability, resolving evacuation constraints, and implementing other targeted recovery initiatives,” spokesman, Mr Andey Odeh, stated in the report.

The company’s strong financial contribution remains critical to Nigeria’s fiscal stability. Industry data indicate that the petroleum sector, led by NNPC, accounts for more than 75 percent of government budget funding and over 90 percent of the country’s foreign exchange earnings.

On infrastructure, NNPC reported progress on major gas pipeline projects expected to boost supply and support power generation.

It confirmed the completion of welding works on the 24-inch spur line connecting the Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline to the Gwagwalada Independent Power Plant, alongside ongoing pre-commissioning activities on the mainline.

Work is also continuing on the Obiafu-Obrikom-Oben (OB3) Gas Pipeline, particularly at the River Niger crossing, where drilling operations are progressing as scheduled.

The projects are seen as critical to unlocking domestic gas supply and strengthening Nigeria’s electricity generation capacity.

In contrast, downstream performance remained weak, NNPC stated.

Petrol availability across NNPC retail stations was estimated at 56 percent nationwide, indicating continued supply and distribution challenges.

The company noted, however, that all reported figures remain provisional and subject to reconciliation.

Overall, while operational disruptions continue to pose risks, rising gas output, ongoing infrastructure development, and improved financial performance suggest a cautious but steady recovery path for Nigeria’s state oil company.