The Nigerian National Petroleum Company Limited recorded claims totalling ₦11.2tn from the Federation in 2025. The claims cover costs and advances incurred on the Federation’s behalf, including expenses for securing the country’s oil and gas assets, an analysis of its 2025 audited financial statements has shown.
The statement, obtained on Wednesday, said the ₦11.2tn in receivables represented costs and advances incurred on behalf of the Federation. That is ₦4.07tn, or about 57 per cent, higher than the ₦7.13tn energy security expense recognised in 2024.
The figure highlights the heavy financial burden of protecting oil and gas infrastructure against crude oil theft, pipeline vandalism and other disruptions. This comes even as the national oil company reported higher production and a 33 per cent increase in profit after tax.
The audited accounts, however, show that the ₦11.2tn represents energy security costs and other receivables from the Federation. It is not a straightforward cash expenditure newly recognised in 2025.
The company stated that no energy security expense was recognised in 2025, compared with ₦7.13tn in 2024. This followed a reconciliation of outstanding amounts against royalties, taxes and dividends due as of December 2024. The reconciliation was completed in September 2025.
The figures emerge against the backdrop of the Federal Government’s removal of the petrol subsidy in 2023 and the subsequent deregulation of the downstream petroleum market.
NNPC’s 2024 accounts recorded energy security expenses of ₦7.13tn, up from ₦4.8tn in 2023. That was an increase of about ₦2.33tn, or 48 per cent, between the two years.
The financial report explained, “Other receivables from federation relates to advance payment to Federation and the security costs incurred in protecting the oil and gas assets. This is under the framework of approval between the Government of Nigeria and the Group to incur security costs and charge same to the Federation.”
The statements showed that the group’s energy security cost receivable stood at ₦8.67tn at the end of 2025. Other receivables from the Federation, including advances and security-related costs, brought the total to ₦11.2tn.
According to Note 24.2 of the accounts, other receivables from the Federation relate to advance payments to the government and costs incurred in protecting oil and gas assets.
The company explained that the arrangement operates under an approved framework between the Federal Government and NNPC. The framework allows the national oil company to incur security costs and charge them to the Federation.
The accounts stated, “During the year, no energy security expense was recognised (2024: ₦7.13 trillion). Following a reconciliation exercise with relevant government agencies, the Energy Security Cost receivables were netted off against royalties, taxes, and dividends due as at December 2024. The reconciliation exercise concluded in September 2025.”
The disclosure means the ₦8.67tn energy security balance should not be read as fresh spending incurred entirely in 2025. It reflects the outstanding balance carried in the accounts before its reconciliation against government obligations.
The issue is significant because oil theft, pipeline attacks and production disruptions have long limited Nigeria’s ability to maximise crude oil output and earn foreign exchange from petroleum exports.
NNPC’s results showed that crude oil and condensate production averaged 1.77 million barrels per day in 2025, the highest level in five years. Natural gas production reached a three-year high of 7.2 billion standard cubic feet per day.
The company said, “Oil and condensate production totalled 565.8 million barrels, up 5 per cent, with NNPC Limited’s equity share increasing 11 per cent to 223.7 million barrels.
“Natural gas production reached 2,606.2 billion standard cubic feet, up 9 per cent, while its equity share rose 11 per cent to 1,154.9 billion standard cubic feet.”
Despite the improved output, the accounts showed that pipeline maintenance costs fell sharply to ₦13.813bn in 2025 from ₦149.478bn in 2024. That is a drop of ₦135.665bn, or 90.8 per cent.
The NNPC Group Chief Executive Officer, Bayo Ojulari, spoke at the media parley to announce the financial results. He said the company was also recording improvements in the fight against crude oil theft, particularly on major crude evacuation pipelines.
He said community-based surveillance, government intervention and the efforts of security agencies had helped restore the availability of major pipelines. He noted that reconciliation between crude produced and volumes accounted for at terminals had improved significantly.
“The most devastating theft has been on our major pipelines in the past, if you remember, right? With the combination of both community-based surveillance and intervention combined with the armed forces, we’ve seen stability, and most of those pipelines have retained 100 per cent availability,” Ojulari said.
He added that while the major pipelines were now more reliable, theft remained a challenge around smaller pipelines and wellheads across difficult terrains.
“We’re installing high-technology, what we call well-head cages, that detect intruders and can quickly respond… On some of the pipelines now, we’re also leveraging technology. We’re advancing technology using fibre optics technology as much as possible and intruder detection,” he said.
In its announcement, NNPC reported a profit after tax of ₦7.2tn, up from ₦5.4tn in 2024. Earnings before interest, taxes, depreciation and amortisation rose by 22 per cent to ₦18tn.
Operating cash flow grew by 16 per cent to ₦12.8tn, and earnings per share rose by 32 per cent to ₦35.9. The declared dividend reached ₦5.8tn, while revenue stood at ₦34.5tn.
The company credited its improved operational performance partly to progress on strategic infrastructure projects. These included the completion of the River Niger crossing on the Ajaokuta-Kaduna-Kano gas pipeline and the completion of the 40-inch, 623-kilometre mainline.
It also said it commissioned the ANOH-OB3 Custody Transfer Metering Station and advanced the 300 million standard cubic feet per day ANOH Gas Processing Plant towards start-up readiness. In addition, it acquired 500 compressed natural gas-powered trucks.
NNPC’s forward targets include raising crude oil production to two million barrels per day by 2027 and three million barrels per day by 2030. It is also targeting gas production of 12 billion standard cubic feet per day by 2030. The company plans to mobilise $60bn in upstream, midstream and downstream investments over the period.
The financial statements do not provide a separate, quantified breakdown of petrol subsidy payments for 2025 in the figures supplied. The energy security receivables therefore cannot be treated as a direct measure of savings from the removal of petrol subsidies.
However, the disclosure indicates the scale of another major petroleum-sector obligation facing the government. The government is seeking to improve production, protect infrastructure and strengthen public finances.
