The Nigerian National Petroleum Company Limited (NNPC Ltd) incurred about N27.76 trillion in cost of sales, selling and distribution expenses as well as general and administrative expenses in 2025, raising questions about the company’s cost structure when compared with other national oil companies.

The figure represented about 80.4 per cent of the N34.52 trillion revenue reported by NNPC for the financial year.

The expenditure was equivalent to approximately 18.29 billion dollars based on an average exchange rate of N1,518 to the dollar, while the company’s revenue translated to about 22.74 billion dollars.

By comparison, Brazil’s state-controlled Petrobras reported 89.2 billion dollars in sales revenue and about 16.3 billion dollars in operating costs in 2025.

The figures show that NNPC’s operating costs were about 13 per cent higher than those of Petrobras, although Petrobras generated almost four times NNPC’s revenue.

NNPC generated approximately 1.24 dollars in revenue for every dollar spent on operating costs, compared with about 5.46 dollars for Petrobras, based on their respective reported figures.

Saudi Aramco reported 445.65 billion dollars in revenue and other sales-related income and 257.17 billion dollars in operating costs in 2025, representing 57.7 per cent of revenue.

Norway’s Equinor recorded 106.46 billion dollars in revenue and other income, alongside 81.11 billion dollars in total operating expenses, representing about 76.2 per cent of revenue.

Angola’s Sonangol, meanwhile, reported 9.15 billion dollars in consolidated turnover in 2025, with EBITDA of 2.63 billion dollars and net profit exceeding 750 million dollars.

However, the comparisons do not by themselves establish operational efficiency because the companies have different production profiles, portfolios, accounting systems and downstream operations.

The NNPC figure was derived from separate components of its audited financial statements rather than from a single line item labelled operating expenses.

The largest component was cost of sales, which stood at N25.14 trillion, down from N33.3 trillion in 2024.

Within the cost of sales, royalties accounted for N4.66 trillion, direct well expenses N4.15 trillion, depreciation of oil and gas properties N3.71 trillion, crude oil purchases N2.79 trillion and gas purchases N1.86 trillion.

NNPC also recorded N1.69 trillion in flow-station expenses, N1.28 trillion in other direct costs, N1.06 trillion in crude handling and port charges and N499 billion in gas-flaring expenses.

Other charges included N514.7 billion paid as Niger Delta Development Commission levy, N213.9 billion for insurance and security, N254.5 billion for labour and N174.6 billion in variation in crude stock.

Selling and distribution expenses amounted to N33.1 billion, which NNPC said covered services obtained by its retail subsidiary for transporting petroleum products to depots within and outside the country.

General and administrative expenses stood at N2.59 trillion, compared with N3.5 trillion in 2024.

Employee benefits accounted for N813.9 billion, while depreciation of other property, plant and equipment amounted to N665.8 billion and depreciation of right-of-use assets N109.3 billion.

Other administrative expenses included N87.3 billion for professional and consultancy fees, N86.4 billion for software licences and maintenance, N129.1 billion for security, N114.8 billion for transport and travelling and N111 billion for training and recruitment.

NNPC also spent N89.3 billion on insurance, N29.2 billion on community development, N10.3 billion on donations, N33.5 billion on rent and rates and N9.2 billion on bank charges.

The three principal categories — N25.14 trillion in cost of sales, N33.1 billion in selling and distribution expenses and N2.59 trillion in general and administrative expenses — combined to produce the reported N27.76 trillion operating-cost figure.