In 2022, offshore subsidiaries of the Nigerian National Petroleum Company Limited (NNPCL) played a crucial role in the company’s financial performance, contributing 37% of its overall revenue for the year. The NNPCL’s audited financial report for the year ended December 31, 2022, highlighted that these subsidiaries brought in N3.26 trillion out of the company’s total revenue of N8.82 trillion.
NNPCL, which officially became a limited liability company in September 2021, operates under the framework of the Petroleum Industry Act (PIA). The company oversees commercial activities within Nigeria’s oil and gas sector and is involved in various domestic and international ventures. As of 2022, the company manages six key offshore subsidiaries in countries such as the United Kingdom, Panama, Bermuda, the United Arab Emirates, and more. These subsidiaries focus on various activities, including the trading of crude oil, reinsurance, shipping services, and gas transportation.
Among these, the NNPC Trading SA, based in Panama, emerged as the largest contributor to offshore revenue, providing marketing and trading services for petroleum products. The subsidiary alone was responsible for generating 34.1% of NNPCL’s total 2022 revenue. In comparison, the United Kingdom and the United Arab Emirates subsidiaries contributed much less, with revenues from the UK accounting for just 0.04%, while the UAE subsidiary contributed 1.14%.
The domestic subsidiaries of NNPCL were also strong performers, generating N5.56 trillion, or about 63% of the total revenue. This reinforces the substantial role that local operations play in the overall business strategy of NNPCL.
In addition to the impressive financial results, NNPCL paid significant sums in royalties and charges to the Nigerian government, amounting to N618.8 billion in royalties and N251.97 billion in crude handling and port charges. Despite these costs, the company reported a profit after tax (PAT) of N2.52 trillion in 2022. The final comprehensive income for the year, factoring in other sources of income, including exchange differences on foreign operations, stood at N4.68 trillion, of which N4.68 trillion was attributed to the company’s owners, while N1.44 billion was allocated to non-controlling interests.
Looking ahead, NNPCL continues to explore avenues to enhance its revenue-generating capacity. One such initiative is the ongoing development of the Nigeria-Morocco Gas Pipeline, a project aimed at linking Nigeria’s gas reserves to Morocco and beyond to Europe. The pipeline, which spans approximately 5,300 kilometers, will traverse several West African countries before reaching Morocco. The project, initially launched in 2017, has gained significant momentum with recent discussions between Nigerian and Moroccan officials.
Key stakeholders in these discussions include Hon. Ekperikpe Ekpo, Nigeria’s Minister of State for Petroleum Resources (Gas), and Leila Benali, Morocco’s Minister of Energy Transition and Sustainable Development. They were joined by Olalekan Ogunleye, Executive Vice President of Gas, Power & New Energy at NNPCL, and Mme Amina Benkhadra, Director General of Morocco’s National Office of Hydrocarbons and Mines (ONHYM). The pipeline project is expected to have a 30 billion cubic meters (bcm) annual capacity, which will help facilitate the transport of gas from Nigeria to various countries across Africa and potentially Europe.
This strategic move highlights NNPCL’s long-term vision to not only increase its revenue through both domestic and offshore operations but also to play a pivotal role in shaping Africa’s energy future, providing natural gas to multiple regions and driving further economic growth.
