By Iroyin Yoruba Television
The Nigerian National Petroleum Company Limited is preparing to restructure parts of its business portfolio, including non-core and underperforming assets, as the state-owned energy company seeks to improve profitability, strengthen capital efficiency and generate better returns for its shareholders.
The development was disclosed by NNPC Group Chief Executive Officer, Bashir Bayo Ojulari, while presenting the company’s 2025 performance and outlining its medium-term strategy.
The proposed restructuring is expected to involve a review of the ownership and operating models of selected businesses and assets, including refineries. NNPC also intends to strengthen businesses considered strategically important to its future, particularly power and trading, while taking a more disciplined approach to assets that do not deliver sufficient commercial value.
The strategy represents another stage in NNPC’s transformation from a traditional state petroleum corporation into a commercially focused energy company. Under the current approach, the company is placing greater emphasis on financial performance, operational reliability, capital discipline and the ability of individual businesses to generate sustainable value.
Ojulari said the planned actions were designed to improve returns, enhance the efficiency with which capital is deployed and position NNPC for sustainable long-term growth.
The restructuring comes against the backdrop of stronger financial results reported by the company. NNPC said its profit after tax increased by 33 per cent to N7.2 trillion, while dividends rose by 35 per cent year-on-year to N5.8 trillion.
Operating cash flow also increased by 16 per cent to N12.8 trillion, while return on equity improved by two percentage points to 16 per cent.
Those figures provide important context for the restructuring programme. Rather than being presented as a response to an immediate financial crisis, the strategy is being positioned as an effort to make a stronger company more commercially efficient and better prepared for future changes in the energy market.
A SHIFT TOWARD COMMERCIAL DISCIPLINE
NNPC’s restructuring plan reflects the increasing pressure on large energy companies to ensure that capital is directed toward businesses capable of generating competitive returns.
For a company with interests across oil exploration, gas production, refining, trading, power and other areas of the petroleum value chain, the performance of individual assets can vary considerably. Some may have strategic importance even when immediate financial returns are limited, while others may require substantial investment before becoming commercially attractive.
The decision to review non-core and underperforming assets therefore suggests that NNPC wants to distinguish more clearly between businesses that should receive additional capital and those that may require a different ownership, operating or investment structure.
The company has not indicated that every asset under review will be sold. The stated approach involves rationalisation and reviews of ownership and operating models, meaning individual assets could potentially be restructured, partnered, repositioned or otherwise managed differently depending on their commercial prospects.
That distinction is important because Nigeria’s petroleum industry contains infrastructure and businesses that have strategic implications beyond their immediate financial performance.
Refineries, for example, have implications for domestic fuel supply and energy security. Trading and power activities have broader implications for the company’s position across the energy value chain. Decisions affecting such assets could therefore have consequences for both NNPC and the wider Nigerian economy.
REFINERIES AMONG ASSETS UNDER REVIEW
Refineries are specifically included in the review of ownership and operating models.
Nigeria has spent years attempting to improve the performance of its domestic refining infrastructure, while private-sector refining capacity has also expanded the country’s petroleum-processing landscape.
NNPC’s latest position indicates that the company is examining how its refining interests should be structured within a broader commercial strategy.
The objective, according to the company’s stated approach, is to improve capital efficiency and returns. That means future decisions will have to balance commercial considerations with the national importance of reliable petroleum-product supply.
The restructuring could therefore become significant for the future direction of NNPC’s downstream operations.
The company has also been dealing with a changing downstream market following the deregulation of gasoline prices. According to Ojulari’s presentation, white-product sales declined sharply during the year, falling by 60 per cent.
NNPC attributed that decline to the structural change in its downstream market role following deregulation.
The change illustrates why the company is reassessing how different parts of its portfolio fit into its long-term business model.
OIL AND GAS OPERATIONS SHOW IMPROVEMENT
While some areas of the business are being reviewed, NNPC reported stronger performance in its core oil and gas operations.
Oil and condensate production increased by five per cent, which the company attributed to new well additions, targeted interventions at OML 13 and improvements in asset integrity.
The interventions contributed about 32,400 barrels of oil per day, according to the company.
Natural gas production also increased by nine per cent, supported by stronger performance from projects including the Uzu field gas project and Agbada NAG Train 1, as well as major well interventions.
NNPC’s equity volumes across oil, condensate and natural gas increased by 11 per cent.
The company linked those gains to better asset reliability, maintenance and operational discipline.
The performance is important because NNPC’s restructuring strategy depends partly on strengthening the businesses that can provide dependable earnings and cash flow.
Rather than simply reducing the size of the portfolio, the company is seeking to build a more focused portfolio in which strategically important businesses can receive the attention and investment required to expand.
GAS BECOMES AN INCREASINGLY IMPORTANT PART OF THE STRATEGY
Gas recorded particularly strong growth during the period under review.
NNPC said gas transmission volumes increased by 18 per cent, while sales volumes grew by 12 per cent. Liquefied natural gas volumes also increased by 11 per cent.
The performance reinforces the growing importance of gas within Nigeria’s energy strategy.
Gas has potential applications across power generation, industrial production and export markets, while increased gas availability can also support efforts to improve electricity supply and industrial activity.
For NNPC, stronger gas performance provides an opportunity to diversify its revenue base while maintaining its position within the wider petroleum industry.
The company’s emphasis on power and trading as strategic businesses also indicates an intention to participate more broadly across the energy value chain.
AMBITIOUS PRODUCTION TARGETS
NNPC is also setting ambitious medium-term production objectives.
The company is targeting oil and condensate production of three million barrels per day and natural gas production of 12 billion standard cubic feet per day.
Achieving such targets would require significant investment, operational reliability, infrastructure availability and continued improvement in the performance of producing assets.
The targets also demonstrate why NNPC is reviewing the allocation of capital across its portfolio.
A company seeking substantial growth in production and gas output must ensure that available financial resources are concentrated on assets capable of contributing to those objectives.
The proposed rationalisation of non-core and underperforming businesses can therefore be viewed as part of a broader effort to create room for investment in strategic areas.
WHAT THE RESTRUCTURING COULD MEAN FOR INVESTORS
For investors and other stakeholders, the restructuring could provide greater clarity about how NNPC intends to allocate capital.
The company’s reported N7.2 trillion profit after tax and N12.8 trillion operating cash flow provide a stronger financial base from which to pursue strategic investments.
However, the size of the company’s earnings does not automatically mean that every asset should continue receiving the same level of investment.
Energy companies around the world regularly reassess portfolios because market conditions, production costs, technology, government policy and consumer demand change over time.
A more commercially focused NNPC could therefore place greater emphasis on assets with clear growth potential, dependable cash generation and strategic relevance.
The process will nevertheless require careful execution.
Restructuring large energy assets can involve employees, contractors, communities, regulators, business partners and government interests. Changes to ownership or operating arrangements can also require negotiations and regulatory approvals.
For that reason, the eventual impact of the strategy will depend not only on which assets are identified for restructuring but also on how the process is implemented.
IMPLICATIONS FOR NIGERIA’S ENERGY INDUSTRY
The development could have implications beyond NNPC itself.
As Nigeria’s largest state-owned energy company, NNPC plays an important role in the country’s oil and gas industry. Its investment decisions influence production, infrastructure development, energy supply and relationships with domestic and international partners.
A more commercially disciplined NNPC could potentially create opportunities for private investors if some assets are opened to new ownership or operating arrangements.
At the same time, the company’s decision to strengthen strategic businesses could encourage greater investment in areas such as gas, power and energy infrastructure.
For the Nigerian economy, improved performance at NNPC could also support stronger government revenues and greater capacity to fund strategic investments.
However, these potential benefits will depend on sustained operational improvements and disciplined management rather than financial results from a single year.
A NEW PHASE FOR NNPC
The latest strategy marks another important phase in NNPC’s evolution.
The company is simultaneously reporting stronger financial performance, expanding oil and gas production, increasing gas activity and reviewing assets that do not fit comfortably within its long-term commercial objectives.
That combination suggests that the focus is shifting from simply increasing the size of the company to improving the quality and performance of its portfolio.
The proposed restructuring of non-core and underperforming assets will therefore be closely watched by the Nigerian energy industry.
The central question will be whether NNPC can translate its stronger earnings into more efficient capital allocation, improved operational performance and sustainable growth.
For now, the company’s position is clear: assets that do not adequately contribute to its commercial objectives will face closer scrutiny, while businesses with strong strategic and financial potential will receive greater attention.
If successfully implemented, the strategy could help NNPC build a more focused and financially disciplined energy portfolio while supporting its longer-term ambition to become a stronger and more competitive player in Nigeria’s rapidly changing energy market.