Sophie Lindqvist

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) collected N8.97 trillion in federal oil and gas royalties in 2025, down about 19% even as average daily crude output rose 7.5%. The divergence matters because higher production did not translate into higher government receipts.

What does the revenue decline change for public finances?

NUPRC’s 2025 annual report showed N10.42 trillion in total revenue, down 20.53% from N12.56 trillion in 2024. The commission finished 36.96% below its N16.54 trillion annual target and recorded revenue performance of 63.03%.

For public finances, the result is constrained revenue despite stronger upstream activity. NUPRC delivered little more than three-fifths of its revenue plan, while its central revenue head contracted faster than headline production expanded.

Oil and gas royalties (government payments linked to production), including Project Gazelle and receivables due from the Nigerian National Petroleum Corporation (NNPC), made up 86.08% of revenue. They fell by N2.11 trillion, from N11.08 trillion to N8.97 trillion, while royalty by price, a separate category, declined about 32% to N213.41 billion from N313.72 billion.

NUPRC described the overall result as “a decrease of 20.53 per cent in 2025 over 2024 revenues.” That wording matches the arithmetic, but it does not explain why collections fell.

Several smaller revenue heads moved in opposite directions:

• Gas-flare penalties rose to N611.42 billion from N391.26 billion.
• Signature bonuses, or licence-related fees, increased to N532.94 billion from N369.58 billion.
• Concession rentals rose to N38.19 billion from N23.71 billion.
• Lease-renewal fees fell to N8.23 billion from N230.73 billion.
• The named Good and Valuable Consideration line recorded no income, against N117.02 billion in 2024.

Production rose, but collection economics weakened

Crude oil and condensate (light oil) output rose to 622.14 million barrels from 578.52 million in 2024. Average daily production increased 7.5%, to 1,699,652 barrels per day from 1,580,369.

NUPRC credited new output from Petroleum Prospecting Licence (permission to explore for oil and gas) awardees Naphta Global, Multisub and Ingentia, alongside its Project 1MMBBLS monitoring team. The report called the production figures provisional and warned: “unreconciled volumes and should not be reported as export volumes.”

Fifty-one companies produced crude during 2025, although Atlas Petroleum, Yinka Folawiyo and Prime did not produce throughout the year. NEPL supplied about 15% of output, followed by SPDC at 12.35% and MPNU at 10.65%.

Joint Venture arrangements (shared ownership and operations) accounted for 51% of production. Production Sharing Contracts (production shared with the government) supplied 29%, while Sole Risk operators (parties bearing exploration risk alone) supplied 16%.

Deferred production averaged 116,563 barrels per day, mainly because of outages on the Trans Niger Pipeline, Nembe Creek Trunk Line and Trans Forcados Pipeline. Separately, reconciled figures showed 3.33 million barrels of crude lost to theft in 2025.

NUPRC’s report gave neither crude nor gas prices and did not attribute the royalty decline to price movements. LEADERSHIP checks found lower global prices: the US Energy Information Administration put average Brent crude at about $69 per barrel for 2025, nearly 17% below the prior year.

Brent’s monthly average fell from $79 in January to $63 in December, its lowest monthly average since early 2021. That external price data offers context for the weaker royalty-by-price category, but it does not supply the commission’s missing causal analysis.

Gas output grew, but flaring persisted

Nigeria produced 2.73 trillion cubic feet of gas in 2025, averaging 7.47 billion cubic feet per day. The executive summary said output was 8.8% higher than in 2024, while the commission reported that about 92% of gas produced was utilised.

NUPRC recorded 215.09 billion cubic feet, or 7.89%, as flared, up from 7.61% in 2024.

The commission attributed the flare increase to higher associated gas (gas produced with crude oil), especially new entrants whose associated-gas handling facilities were not yet operating. It directed 59 companies to submit Flare Elimination and Monetisation Plans (operator schemes to reduce flaring and commercialise gas), but only 24 complied.

Operators supplied an average 2,230 million standard cubic feet per day (a gas-volume unit) to the domestic market, equivalent to about 77% of the 2,892 million allocated. Rising supply did not remove the compliance gap or the increase in flaring.

Exports, reserves and licensing

Domestic Crude Supply Obligation (the requirement for upstream suppliers to provide local refineries) volumes rose to 103.37 million barrels from 81.61 million in 2024. Dangote Refinery received 94.44 million barrels of that total.

Total lifting (barrels removed for sale) reached 589.81 million barrels, with exports accounting for about 83%. Oil and condensate reserves stood at 37.28 billion barrels on January 1, 2025, down from 37.50 billion a year earlier, while the reserves replacement ratio (reserves added relative to output) reached 61.79%.

Gas reserves rose 0.61% to 210.54 trillion cubic feet. NUPRC approved 48 of 75 field development plans (plans for developing fields) processed during the year and launched its 2025 Licensing Round on December 1, 2025.

Host communities and NUPRC’s finances

Operators remitted N61.46 billion to host community trusts as the required 3% contribution to operating expenditure. The report counted 160 incorporated trusts, but it did not show how many operated fully or received all payments due.

NUPRC’s own income rose 21.85% to N342.81 billion. It spent N302.53 billion against an approved budget of N645.46 billion. The cited figures do not explain the underspend.