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Concerns of NNPC’s competence arise in Nigeria after Saudi Aramco posts $161.1 billion net profit



On Sunday, March 12, it was announced that Saudi Arabia’s national oil company, Saudi Aramco has posted a net profit of $161.1 billion for 2022. This is the highest profit ever declared by an oil firm anywhere in the world.

Since the announcement, some Nigerians have raised concerns about why NNPC Limited is not turning out better profits, after all, Nigeria is also an oil-rich country – the largest oil producer in West Africa.

High oil prices during war in Ukraine: Saudi Aramco made its profits from the Russian invasion of Ukraine in 2022. Also, note that Saudi Aramco’s profits have been on an upward trend since the end of the coronavirus pandemic. In 2022, the company’s profits rose 46.5% from its declared $110 billion profit in 2021, which is higher than its $49 billion in 2020.

Are NNPCL and Aramco on the same level? Saudi Aramco is the largest oil company in the world. To put this into perspective, as of 2022, Aramco’s crude production was 11.5 million barrels a day and the company plans to reach 13 million barrels per day by 2027. Meanwhile, Nigeria’s crude production (aside from condensates) was 1.3 million barrels per day as of February 2023.

Aramco has said it intends to increase its crude production by spending up to $55 billion in 2023 on capital projects. Meanwhile, NNPCL has not revealed any definite plans as to how much will be spent on capital projects in 2023. Nigerians have however been told that the company is working to increase production by attracting investments. Citizens cannot hold on to anything definite from an administration that has less than 3 months to exit power.

Is it a question of incompetence? Analysts have said issues of underinvestment, lack of transparency, and incompetence across the board are some reasons why Nigeria has not been successful in its oil business in recent times.

Oil analyst, Kayode Oluwadare earlier noted that although Aramco has more oil assets than Nigeria, the issue of transparency has made Aramco so successful while the lack of it has worked against Nigeria as the oil business is shrouded in secrecy. The question of incompetence also arises especially for the fact that salaries are being paid to the staff of refineries that are currently not in use.