The Nigerian National Petroleum Company Limited spent about N27.76 trillion running its business in 2025, a sum equal to roughly 80 per cent of the N34.52 trillion revenue the group reported for the year. The figure, drawn from the company’s 2025 audited financial statements, has put fresh attention on the cost structure of Nigeria’s state oil firm at a time when it is trying to present itself as a commercially run enterprise.
The N27.76 trillion is not a single line in the accounts. It is the sum of three separate pools: cost of sales of N25.14 trillion, selling and distribution expenses of N33.1 billion, and general and administrative expenses of N2.59 trillion. Cost of sales, disclosed under note 8 of the filings, carried the overwhelming share of the burden, though it fell from N33.3 trillion in 2024.
Converted at last year’s average exchange rate of about N1,518 to the dollar, the operating cost works out to roughly 18.29 billion dollars, set against revenue of about 22.74 billion dollars. On that basis the company earned about 1.24 dollars for every dollar it spent on running costs.
Placing that ratio beside other national oil companies is where the debate sharpens. Brazil’s state-controlled Petrobras reported 89.2 billion dollars in sales revenue and about 16.3 billion dollars in operating costs in 2025, meaning it earned roughly 5.46 dollars for every dollar of operating expense. Its costs sat at about 18.3 per cent of revenue, against NNPC’s 80 per cent, even though its operating bill was only about 13 per cent larger than NNPC’s.
Saudi Aramco offers a different shape. The Saudi firm reported 445.65 billion dollars in revenue and related sales income and 257.17 billion dollars in operating costs, about 57.7 per cent of revenue. Norway’s Equinor recorded 106.46 billion dollars in revenue and other income and 81.11 billion dollars in operating expenses, about 76.2 per cent of revenue, closer to the Nigerian position. Angola’s Sonangol, a fellow African producer, reported 9.15 billion dollars in turnover and net profit above 750 million dollars in accounts certified by EY.
Those comparisons come with a caveat the accounts themselves invite. The companies differ in production profile, portfolio mix, accounting treatment and the depth of their downstream operations, so a revenue-to-cost ratio gives useful context rather than a verdict on efficiency. The spread of the figures, from Petrobras at one end to NNPC and Equinor at the other, is itself the clearest evidence that no single ratio settles the question.
Inside NNPC’s cost of sales, several items stand out. Royalties accounted for N4.66 trillion and direct well expenses N4.15 trillion, the two largest cash components. Depreciation of oil and gas properties added N3.71 trillion, though that is an accounting charge rather than money paid out during the year. Crude oil purchases took N2.79 trillion, gas purchases N1.86 trillion and flow-station expenses N1.69 trillion.
Further down the cost ladder sit smaller but notable charges: N1.06 trillion for crude handling and port fees, N514.7 billion in Niger Delta Development Commission levy, N499 billion for gas flaring and N144.4 billion in allocated technical and production costs. The company also booked N1.28 trillion in other direct costs, which it said cover the upkeep of wells, pipelines, processing infrastructure and related field services. A separate N174.6 billion arose from variation in crude stock.
The administrative pool tells its own story of scale. Employee benefits, covering salaries, allowances and welfare, came to N813.9 billion. Depreciation of other property and equipment added N665.8 billion, and right-of-use asset depreciation a further N109.3 billion. Professional and consultancy fees stood at N87.3 billion, software licences and maintenance N86.4 billion, security N129.1 billion, and training and recruitment N111 billion. Smaller entries included N33.5 billion on rent and rates, N29.2 billion on community development, N10.3 billion on donations and N9.2 billion on bank charges.
The cost picture emerged in the same week NNPC reported a stronger bottom line despite weaker sales. Profit after tax rose about 33 per cent to N7.2 trillion from N5.4 trillion in 2024, even as revenue fell 23.4 per cent from N45.08 trillion, a drop the company attributed to lower crude prices and reduced white product volumes after deregulation. Group Chief Executive Bayo Ojulari credited the profit growth to improved operational efficiency and financial discipline, while the accounts show much of the support came from other income, which more than doubled to N8.42 trillion on the back of a surge in sundry income.
The larger significance lies in what the cost base says about value for money at a company that remits heavily to the federation. Remittances in taxes, royalties and statutory payments climbed 39 per cent to N22.3 trillion in 2025, and the firm declared a N5.8 trillion dividend. Whether a cost structure that consumes four-fifths of revenue leaves room for the commercial returns the company now promises its shareholders is a question the audited figures raise without, on their own, answering.