The Nigerian National Petroleum Company (NNPC) Limited generated N12.02 trillion from crude oil sales within Nigeria and N2.04 trillion from sales to Panama, a Central American country, in 2023.
This is contained in the national oil company’s full-year audited results for 2023 which was released on Monday.
While Nigeria is the largest source of revenue for the oil major from crude sales, the report shows that Panama is the only other source of revenue from crude oil for NNPC.
The report indicates that revenue from crude oil sales is derived from both the utilization of crude oil throughout the year and the lifting of equity interests in various oil assets.
Breakdown of the crude oil sales in 2023
- On a year-on-year basis, revenue from crude oil sales in Nigeria increased significantly, rising from N545 billion in 2023 to N12.02 trillion in 2023, representing a growth of about 2100%.
- In contrast, revenue from Panama declined from N2.9 trillion in 2022 to N2.04 trillion in 2023, reflecting a decrease of approximately 29.66%.
- Additionally, while the company earned N19 million from crude oil sales in the United Kingdom in 2022, no revenue was reported from that country in 2023.
- Consequently, NNPC’s total revenue from crude oil sales for the year amounted to N14.07 trillion.
Additional Revenue Sources for NNPC
A review of the report highlights additional revenue sources for NNPC in 2023. These include revenues from the sale of petroleum products and natural gas.
Furthermore, NNPC earned revenue from various services, further contributing to its financial performance for the year.
Petroleum Product Sales – The company reported revenues of N7.1 trillion from petroleum product sales, a significant increase from N4.5 trillion the previous year.
Petroleum product sales encompass fuel, kerosene, diesel, naphtha, and other related products.
Nigeria also remained the leading market in this area, generating N6.9 trillion compared to N4.3 trillion the previous year, accounting for approximately 97% of total petroleum product sales. Sales to the Bahamas totalled N151.7 billion, up from N129.5 billion the year before.
Revenue from Natural Gas – This category, which includes the invoice value of natural gas sold to third parties, generated approximately N2.3 trillion for the year under review, a significant increase from N683 billion reported the previous year.
Nigeria once again was the primary revenue source, contributing N1.9 trillion, up from N638.7 billion in 2022. This accounted for 82.6% of total gas revenues.
Interestingly, the Cayman Islands contributed N402.7 billion to the gas revenue, a notable increase from the previous year’s contributions of N3.9 billion from the UK, N24 billion from Panama, and N16.3 billion from the Cayman Islands.
Revenue from Service — The company reported a substantial increase in revenue from services, totalling N464 billion for the year, a significant rise from N100.5 billion in the previous year.
Nigeria was a major contributor, generating N379.2 billion, a notable increase from zero in 2022.
Cyprus also played a significant role, contributing N80.49 billion.
NoIn contrast, the Cayman Islands, which had been the sole source of the N100.5 billion revenue in 2022, contributed nothing to the revenue in 2023.
Why This Matters
The national oil company, NNPC, continues to be a major source of revenue and foreign exchange for the Nigerian government.
Its financial performance significantly impacts the fiscal health of the economy, contributing to budgetary funding for infrastructure, education, health, and other essential sectors.
Recently, Olufemi Soneye, NNPC’s Chief Communication Officer, mentioned that the company is the largest contributor of tax revenue to the Federation Account.
According to its 2023 audited financial report, NNPC paid N2.69 trillion in income tax to the federal government.
Furthermore, NNPC’s fiscal performance in 2023, showing a profit of N3.29 trillion after tax, represents the highest profit ever recorded by a company in Nigeria, as noted by Nairametrics.
