Nigerian National Petroleum Company Limited (NNPC Ltd) reported N27.76 trillion in operating expenses for 2025, comprising cost of sales, distribution expenses, and general and administrative expenses. This figure represents approximately 80.4% of the company's N34.52 trillion revenue for the financial year. The operating cost translates to around $18.29 billion, using the 2025 average exchange rate of N1,518 to the dollar.
A comparison with other major national oil companies reveals that NNPC's operating cost is substantial. Brazil's state-controlled Petrobras reported $89.2 billion in sales revenue and $16.3 billion in operating costs in 2025. Although NNPC's operating cost was 13% higher than Petrobras', the latter generated almost four times NNPC's revenue. The revenue-to-cost ratio also differs significantly between the two companies.
Saudi Aramco, another major national oil company, reported $445.65 billion in revenue and $257.17 billion in operating costs in 2025. Its operating costs represented 57.7% of revenue. In contrast, NNPC generated about $1.24 in revenue for every $1 spent on operating costs, compared with approximately $5.46 for Petrobras.
The scale and composition of costs vary substantially across national oil companies. Norway's Equinor reported $106.46 billion in revenue and $81.11 billion in total operating expenses in 2025. Angola's Sonangol reported $9.15 billion in consolidated turnover and $2.63 billion in EBITDA in 2025. These comparisons provide context for NNPC's cost structure but do not necessarily indicate operational efficiency.
NNPC's cost of sales, the largest component of its operating expenses, stood at N25.14 trillion in 2025. This includes petroleum products, depreciation of oil and gas properties, royalties, and direct well expenses. The company's accounts also show various other expenditures, such as flow-station expenses, gas purchased, and crude oil purchased.
In addition to cost of sales, NNPC reported N33.1 billion in selling and distribution expenses and N2.59 trillion in general and administrative expenses. Employee benefits, depreciation of property, plant and equipment, and other administrative expenses make up a significant portion of general and administrative expenses.
The NNPC's financial performance has raised concerns about its operational efficiency. The company's operating expenses, although not unusual for the industry, highlight the need for cost optimization. As one of the largest national oil companies, NNPC's financial performance has implications for Nigeria's economy.
Key points
- NNPC's operating expenses accounted for 80.4% of its revenue in 2025.
- The company's cost structure is substantial compared to its peers, including Petrobras and Saudi Aramco.
- NNPC's financial performance raises concerns about its operational efficiency and the need for cost optimization.
