The Nigerian National Petroleum Company Limited recorded N11.2tn in claims from the Federation in 2025 for advances and costs incurred on behalf of the government, including expenses connected to the protection of Nigeria’s oil and gas assets.
The figure is contained in NNPC’s 2025 audited financial statements and represents a substantial increase from the N7.13tn energy security expense recorded in the company’s 2024 accounts.
However, the N11.2tn should not be interpreted as a new cash expenditure recognised by NNPC during 2025. The audited accounts distinguish between energy security costs and other receivables owed by the Federation.
The company’s financial statements show that N8.67tn of the amount stood as energy security cost receivable at the end of 2025, while other advances and receivables from the Federation brought the total claims to N11.2tn.
The arrangement allows NNPC to incur approved costs associated with securing oil and gas infrastructure and subsequently charge those expenses to the Federation.
The expenses are linked to the protection of critical petroleum infrastructure from threats including crude oil theft, pipeline vandalism and other disruptions capable of affecting national production.
The development highlights the financial demands placed on the oil sector by the security challenges surrounding Nigeria’s petroleum assets, even as NNPC says production has improved significantly.
In April 2026, NNPC said national crude oil production had increased from a historic low of about 960,000 barrels per day in 2022 to an average of 1.71 million barrels per day, with peak production reaching 1.84 million barrels per day in 2025.
The company attributed the production improvement partly to its integrated energy security model, which combines intelligence gathering, security operations, regulatory oversight, industry cooperation and community-based surveillance.
Despite the large security-related claims, NNPC’s 2025 financial results showed that the company recorded stronger profitability. Its profit after tax increased by 33 per cent during the year.
The financial statements also showed that NNPC’s total revenue from contracts with customers stood at N34.52tn in 2025, covering crude oil, petroleum products, natural gas, power and services.
Crude oil sales accounted for N25.39tn during the year, compared with N29.2tn in 2024, while petroleum product revenue fell from N9.68tn to N2.1tn.
Natural gas revenue moved in the opposite direction, rising to N6.15tn in 2025 from N5.2tn recorded in the previous year.
NNPC also reported N499bn in gas flare penalties and fees during the year, reflecting statutory charges associated with gas flaring in the petroleum sector.
The company’s accounts further revealed that no new energy security expense was recognised in 2025 after a reconciliation of outstanding amounts with royalties, taxes and dividends owed to the government.
That reconciliation, according to the financial statements, was completed in September 2025, with the relevant amounts adjusted against obligations involving the Federation.
NNPC’s 2024 accounts had recorded N7.13tn in energy security expenses, up from N4.8tn in 2023, showing how rapidly the financial burden had grown before the reconciliation carried out in 2025.
The latest figures therefore place renewed attention on the cost of securing Nigeria’s oil-producing infrastructure at a time when the government is relying heavily on higher crude production to strengthen public finances and foreign exchange earnings.
The increase also comes after the removal of the petrol subsidy and the deregulation of the downstream petroleum market, which changed the way NNPC accounts for several government-related petroleum obligations.
For NNPC, the security arrangement remains part of efforts to protect oil and gas infrastructure and sustain production. The company has continued to argue that improved pipeline security has contributed to the recovery in national crude output.
The N11.2tn figure, however, also demonstrates the scale of financial obligations accumulating between the national oil company and the Federation as NNPC continues to incur approved costs on behalf of the government.
As Nigeria seeks to increase crude production and maximise revenue from its petroleum resources, the cost of protecting the infrastructure responsible for generating those revenues remains a major part of the country’s oil-sector finances.