Nigeria Earns N5.21tn from Oil Sales in H1 2025, Faces Revenue Target Pressure Amid Industry Warnings
The Federal Government of Nigeria, through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), generated N5.21 trillion from crude oil, gas sales, and related activities in the first half of 2025. This represents 42.7% of the record N12.2 trillion earned in 2024 and 34.7% of the N15 trillion revenue target set for the year. Revenue streams included royalties, gas sales, flared gas penalties, and joint venture (JV) proceeds, with significant contributions from Nigerian National Petroleum Company Limited (NNPCL) JV and production sharing contract (PSC) royalties totaling N1.04 trillion.
The commission’s report, submitted to the Federation Accounts Allocation Committee, revealed N315.93 billion in receipts from the controversial Project Gazelle between January and March 2025, with no inflows in the following months. Additionally, NNPC JV royalty receivables from October 2022 to June 2025 amounted to N6.6 trillion due to delayed remittances. The NUPRC also recovered $459,226 from outstanding crude oil lifting obligations, reducing but not eliminating a $1.436 billion debt.
NUPRC Chief Executive, Gbenga Komolafe, affirmed the ambitious N15 trillion revenue target for 2025, stating that the commission has devised a strategic approach to meet it. Despite surpassing its 2024 revenue goal by 163%, mid-year earnings suggest the commission may fall short unless oil production increases and outstanding arrears are cleared. The commission emphasized that achieving this target is critical for funding the 2025 budget.
Industry experts have cautioned the government against transforming the NUPRC into a primarily revenue-driven agency, warning that aggressive fiscal demands could deter investment in Nigeria’s oil and gas sector. Energy policy analyst Dayo Ayoade stressed that while revenue generation is important, conflating regulatory oversight with taxation risks distorting the commission’s mandate under the Petroleum Industry Act. Excessive financial pressure, he argued, could drive international oil companies to more investor-friendly jurisdictions.
Petroleum engineer Bala Zaka attributed the sector’s revenue challenges to years of a hostile business environment, which has pushed multinationals out of Nigeria to more secure regions like East Africa. He noted that indigenous operators who took over onshore and shallow-water assets have not significantly increased exploration or reserves. Both experts urged the government to prioritize security, reduce regulatory bottlenecks, and incentivize exploration to boost production sustainably, warning that without such reforms, Nigeria’s revenue ambitions could undermine the industry’s long-term viability.
Source: Punch