Federal Govt Royalties Drop 19% To N8.97trn Despite Rise In Oil, Gas Production – NUPRC

Royalties collected for the federal government by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) fell by about 19 per cent to N8.97 trillion in 2025, even though oil and gas production rose during the year.

Data from the commission’s 2025 Annual Report showed that oil and gas royalties, including Project Gazelle and NNPC receivables, fell from N11.08 trillion in 2024 to N8.97 trillion in 2025, a drop of about N2.11 trillion.

These were the largest revenue head, making up about 86.08 per cent of the N10.42 trillion the commission generated in 2025.

Royalty by price, a separate head, also fell, to N213.41 billion from N313.72 billion, a decline of about 32 per cent.

Total revenue down, target missed Total collections dropped from N12.56 trillion in 2024, which the report described as “a decrease of 20.53 per cent in 2025 over 2024 revenues.” The 2025 figure was also 36.96 per cent below the annual target of N16.54 trillion. The commission put its revenue performance at 63.03 per cent.

Some revenue heads grew. Gas flare penalties rose to N611.42 billion from N391.26 billion, signature bonus to N532.94 billion from N369.58 billion, and concession rentals to N38.19 billion from N23.71 billion.

Lease renewal fees, however, fell to N8.23 billion from N230.73 billion. No income was recorded under Good and Valuable Consideration, against N117.02 billion in 2024.

Production Up

Crude oil and condensate output rose to 622.14 million barrels from 578.52 million barrels in 2024. Average daily production rose to 1,699,652 barrels per day from 1,580,369, an increase of 7.5 per cent.

The report credited new production from Petroleum Prospecting Licence awardees, namely Naphta Global, Multisub, and Ingentia, as well as the commission’s Project 1MMBBLS monitoring team. It said the figures were provisional and were “unreconciled volumes and should not be reported as export volumes.”

Fifty-one companies produced crude in 2025, but three of them, Atlas Petroleum, Yinka Folawiyo and Prime, were shut in throughout the year. NEPL was the top producer, accounting for about 15 per cent of output, followed by SPDC at 12.35 per cent and MPNU at 10.65 per cent.

Joint Venture arrangements accounted for 51 per cent of production, Production Sharing Contracts for 29 per cent and Sole Risk operators for 16 per cent.

THE commission noted that deferred production averaged 116,563 barrels per day, mainly because of outages on key pipelines, including the Trans Niger Pipeline, the Nembe Creek Trunk Line and the Trans Forcados Pipeline.

The report showed that reconciled figures also showed that 3.33 million barrels of crude were lost to theft in 2025.

Though the report gave no crude oil or gas prices and did not link the fall in royalties to price movements, LEADERSHIP checks however, showed that global crude prices fell during the year.

The average price of Brent crude in 2025 was about $69 per barrel, a decrease of nearly 17 per cent from the previous year, according to the US Energy Information Administration (EIA). The EIA said the monthly Brent average fell from $79 in January to $63 in December, the lowest monthly average since early 2021.

Gas output and flaring

Nigeria produced 2.73 trillion cubic feet of gas in 2025, averaging 7.47 billion cubic feet per day. The executive summary said this was 8.8 per cent higher than in 2024.

About 92 per cent of the gas was utilised. Export sales accounted for 36.5 per cent of gas produced, while domestic sales accounted for 32 per cent.

The commission said 215.09 billion cubic feet, or 7.89 per cent, was flared, up from 7.61 per cent in 2024. It linked the rise to higher associated gas production, “especially from new entrants whose AG handling facilities are yet to be on board.”

Only 24 of the 59 companies directed to submit Flare Elimination and Monetisation Plans had complied.

Operators delivered an average of 2,230 million standard cubic feet per day to the domestic market, about 77 per cent of the 2,892 million allocated.

Domestic crude and exports

Crude supplied to domestic refineries under the Domestic Crude Supply Obligation rose to 103.37 million barrels from 81.61 million barrels in 2024. The Dangote Refinery received 94.44 million barrels of the total.

Total lifting was 589.81 million barrels, and exports accounted for about 83 per cent.

Reserves and licensing

Oil and condensate reserves stood at 37.28 billion barrels as at January 1, 2025, down from 37.50 billion barrels a year earlier. The reserves replacement ratio was 61.79 per cent. Gas reserves rose 0.61 per cent to 210.54 trillion cubic feet.

The commission approved 48 of the 75 field development plans it processed in 2025. It launched the 2025 Licensing Round on December 1, 2025.

Host communities and commission’s finances

Operators remitted N61.46 billion to host community trusts in 2025 as the 3 per cent operating expenditure contribution. The report said 160 trusts had been incorporated.

The commission’s own income rose 21.85 per cent to N342.81 billion. It spent N302.53 billion against an approved budget of N645.46 billion.