NNPCL ASSET SECURITIZATION POLICY IS A GAME CHANGER
Lucky Ighoyota
In June 2025, the Nigerian National Petroleum Company Limited (NNPC Ltd.) recorded a milestone of 100% availability on its major crude oil pipelines, leading to a rebound in crude oil and condensate production and contributing to increased revenue for the month. This achievement, the first in a long time, was driven by industry-wide security interventions and effective contract management on key infrastructure projects.
This milestone boosted crude oil and condensate production to 1.68 million barrels per day in June 2025, the highest since January. The increased production and stable pipeline availability contributed to NNPC’s total revenue of N4.571 trillion for June 2025.
The 100% pipeline availability directly supported increased crude oil output and, consequently, higher revenue for the nation.
The achievement boosted confidence in Nigeria’s oil sector and signaled a sustained recovery in upstream activities. It also demonstrated progress in completing critical gas infrastructure projects, crucial for delivering gas to industrial and population centers.
But in July, the company recorded a substantial decline in its profit after tax, dropping from N905bn in June to N185bn in July. This represents a staggering 79.6% decrease in profit. The July figure marked a significant decline even as oil production rose marginally from 1.68 million barrels per day to 1.7 mbpd, while natural gas production was 7.7 billion cubic feet, compared to 7.58 bcf last month.
Although the NNPCL didn’t provide any explanation for this sharp decline in July, but giving the facts on ground based on key challenges before the global production index, one could easily peg this profit slump on lower crude production Nigeria has struggled to meet its OPEC production quota, averaging below the expected 1.5 million barrels per day, due to persistent issues such as underinvestment in upstream operations, the company’s extensive refinery rehabilitation program, which, while necessary for long-term self-sufficiency, has demanded substantial capital expenditure.
NNPCL is investing heavily in restoring key refineries, including those in Port Harcourt, Warri, and Kaduna, with the goal of reducing Nigeria’s reliance on imported petroleum products. While these projects are expected to yield benefits in the medium to long term, they have currently placed significant pressure on cash flow.
Beyond operational setbacks, external market conditions have also played a role in the recent performance slump. Crude oil prices, though relatively stable, have seen fluctuations due to global supply uncertainties, geopolitical tensions, and shifting demand patterns.
Although, NNPC Group Chief Executive Officer Bayo Ojulari informed stakeholders that the dip in profits was anticipated as part of a broader strategy to position the company for sustainable growth. According to him, current investments are aimed at enhancing domestic refining capacity, improving operational efficiency, and ensuring long-term profitability were part of factors responsible for the slump. Hence, once the refinery projects come on stream and upstream production stabilizes, the company expects to deliver stronger financial results.
The profit slump in July would have been worse if the pipeline securitization policy is not in place. If the rebound in crude oil and condensate production that contributed to the increased revenue for the month of June was based on industry-wide security interventions and effective contract management on key infrastructure projects, it shows that if the securitization policy is not in place, the profit slump would have been terrible.
The primary benefit of an NNPC Pipeline Securitization Policy being marshaled by Pipeline Infrastructure Nigeria Limited (PINL) and others is the substantial reduction in losses from oil theft and vandalism, projected to save Nigeria hundreds of millions of dollars monthly. This policy also enhances the efficiency and security of the entire national energy infrastructure, fostering economic growth, increasing industrial capacity, and contributing to greater energy self-sufficiency and product supply within Nigeria and the ECOWAS region.
The policy directly addresses pipeline vandalism and crude oil theft, which result in significant daily revenue loss for the nation. Securitization helps stop this bleeding, potentially saving hundreds of millions of dollars each month.
A more secure and efficient pipeline network attracts investment, creating new business opportunities for potential investors and facilitating expansion within the region. By ensuring the stable and reliable flow of oil and refined products, the policy supports industrial capacity growth, population growth, and an increase in Nigeria’s per capita income.
By securing infrastructure, the NNPCL effectively delivers crude oil to refineries, support the goal of achieving national self-sufficiency in refined petroleum products. Also, the secured pipeline network guarantees the reliable delivery of fuel and other petroleum products, which is crucial for the everyday functioning of the economy and society.
This policy has impacted revenue projections for oil production in Nigeria, a country that remains heavily reliant on petroleum as its primary source of income.
Lucky Ighoyota,
Consultant Energy Economist
