The Federal Government, through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), earned N5.21 trillion from crude oil, gas, and related activities in the first half of 2025, according to a new report presented at the Federation Accounts Allocation Committee (FAAC) meeting.
This represents 42.7% of the record N12.2 trillion the commission generated in all of 2024 but only 34.7% of its ambitious N15 trillion revenue target for 2025.
The revenue was sourced from royalties, gas sales, penalties for flared gas, and joint venture (JV) proceeds. Included in the earnings is N1.04 trillion from NNPC joint venture and production sharing contracts (PSCs), and N315.93 billion from the controversial Project Gazelle—though no payments from this project were recorded in most months of 2025 so far.
The report also highlighted delayed payments from NNPC, with JV royalty receivables from October 2022 to June 2025 now totaling N6.60 trillion, showing how backlogs are impacting overall cash flow.
Additionally, the commission confirmed it recovered $459,226 from outstanding obligations—part of a larger $1.436 billion debt tied to past crude oil lifting contracts. The remaining balance is now $1.435 billion. This reconciliation is being overseen by the NNPCL-Federation Alignment Committee.
NUPRC Boss Confirms N15tn Target
NUPRC Chief Executive Gbenga Komolafe confirmed the 2025 target, acknowledging the size of the challenge but expressing confidence in the commission’s strategy to meet it.
N15 trillion is large, but we are not intimidated. We are defining a strategic approach to achieve it, Komolafe said.
Despite the optimism, the commission’s mid-year revenue falls behind the pace needed to hit the target, raising concerns it may miss projections unless production increases or arrears are quickly cleared.
Experts Warn Against Revenue-Driven Regulation
Energy experts have raised alarms over what they see as the FG’s push to turn the NUPRC into a revenue-focused agency, rather than a regulator—a shift they warn could scare off investment in Nigeria’s oil sector.
Speaking to The PUNCH, energy law expert Dayo Ayoade and petroleum engineer Bala Zaka cautioned that overemphasis on revenue could undermine the commission’s regulatory role.
The NUPRC is supposed to be a technical regulator, not a tax collector, Ayoade said. Conflating regulation with aggressive revenue generation risks damaging the investment climate.
He added that too much fiscal pressure on oil companies could lead to disinvestment and relocation to countries with friendlier business environments.
Zaka agreed, blaming years of regulatory instability, sabotage, and community hostilities for the exit of multinational oil firms and Nigeria’s ongoing production shortfalls.
What’s happening now is the result of years of hostility. Multinationals left not because of portfolio shifts, but because of extortion, insecurity, and sabotage, Zaka said.
He noted that many indigenous companies who took over assets from departing majors are not investing in exploration, but simply harvesting existing reserves, which limits long-term revenue growth.
The Way Forward
Both experts urged the government to:
- Improve security in oil-producing regions
- Reduce regulatory bottlenecks
- Incentivise exploration and production
- Avoid overburdening operators with taxes and levies
Without these steps, they warned, Nigeria risks losing more ground in the global energy sector and missing vital revenue targets in the years ahead.