The Nigerian National Petroleum Company Limited (NNPCL)’s N5.4 trillion Profit After Tax (PAT) for 2024, has been lauded as the first full-year benchmark under the Petroleum Industry Act (PIA) amid stable operations.
Recall that the NNPCL reported a Profit After Tax (PAT) of N5.4 trillion on a revenue of N45.1 trillion in it’s audited financial statement for the full year ended 2024.
The N45.1 trillion revenue for 2024 represented an 88 per cent year-on-year growth, while the PAT of N5.4 trillion was a 64 per cent year-on-year rise. Besides, earnings per share during the period under consideration was N27.07, a 64 per cent year-on-year increase compared to 2023.
In a media engagement, a foremost African petroleum economist, Professor Wunmi Iledare, dissected the figure’s implications, hailing it as the first full-year benchmark under the Petroleum Industry Act (PIA) amid stable operations. He stressed its role in enabling evidence-based future assessments, beyond one-off boosts from subsidy reforms and forex gains.
Professor Iledare also cut through the noise to offer an unvarnished reading of what the profit truly means, what it does not, and what the future demands.
He said the first thing he did after seeing the profit figure was convert it to dollars. At an exchange rate of N1, 700, the profit translates to about $3.1 billion. At N1, 000, it rises to roughly $5.2 billion. Both outcomes, he explained, highlight the heavy influence of exchange rate risk.
Yet, he urged caution against dismissing the numbers, quoting scripture to remind viewers never to undervalue marginal gains.
For him, the 2024 Annual Report represents something more structural: the first full year of NNPC Limited operating under relative stability. No government transitions, no management upheavals, and a clear framework under the Petroleum Industry Act (PIA) now provide a clean benchmark to evaluate the company’s performance.
On sustainability, he was clear. Part of the profit came from upstream operations, and another portion from macroeconomic factors like subsidy reforms and foreign exchange revaluation. But these are risks present in oil businesses worldwide. What matters, he stressed, is that NNPC now has a full-year financial baseline, allowing future comparisons anchored in evidence rather than speculation.
The discussion then turned to one of Nigeria’s most politically sensitive issues: NNPC’s transparency and remittances to the federation account. Prof. Iledare explained that the Petroleum Industry Act has fundamentally changed the game. Before PIA, the national oil company was not structured as a liability company. Now, it must pay royalties, taxes, levies, and all statutory obligations, just like Shell, Total, or any other operator. Where the government owns joint venture assets, NNPC Limited assumes responsibility and pays taxes like any other company. Only after profit is declared does the board decide dividends to the federal purse. “The company is no longer a cash cow,” he said, emphasising that public judgment must now align with the standards applied to private and international operators.
Asked for a single data point showing that this transformation is real, not cosmetic, Prof. Iledare pointed to crude reserves and installed capacity. Nigeria has about 37 billion barrels of proven reserves. Industry logic suggests producing roughly 3 percent annually is sustainable, around 3 million barrels per day. While this target has shifted over the years, from 2010 to 2020, the capacity exists. The main threat is security, not geology. Statistically, he said, there’s a 90 per cent chance Nigeria can recover the needed volumes.
Profitability, however, is more complex than production. NNPC still faces some of the highest per-barrel operating costs among peer companies. Tightening cost centers and eliminating inefficiencies could push profits beyond N5.4 trillion, but managing inflation and exchange rate volatility, which lie outside the company’s control, remains key. Within its control, however, are production volume and cost discipline.
The conversation also addressed the global shift from fossil fuels to renewables. Could NNPC’s investments in gas infrastructure become stranded assets? Prof. Iledare pushed back. Renewable energy is growing, and climate concerns are real, but Nigeria’s challenge is governance, not geology. With over 200 trillion cubic feet of natural gas, the largest proven reserves in Africa, Nigeria has the fuel needed for power, industry, and economic growth. Much of it is stranded today, but that also represents opportunity. Emerging institutions such as like the African Energy Bank, could support large-scale oil and gas financing even as global lenders retreat.
The recurring theme of Prof. Iledare’s analysis was clear that Nigeria’s oil and gas future will be determined by governance, not geology. NNPC Limited now has a benchmark year. How it builds on this performance will decide whether the N5.4 trillion profit marks the start of a sustainable trajectory or a temporary lift shaped by forces outside its control.
