The Federal Government has generated N5.21 trillion from oil sales in the first half of 2025, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). This revenue represents 42.7% of the record N12.2 trillion generated in the entire 2024 fiscal year. However, it falls short of the N15 trillion revenue target set by the Federal Government for the commission to meet in implementing the 2025 budget.
The N5.21 trillion revenue includes payments from Nigerian National Petroleum Company Limited joint venture and production sharing contract royalty receivables totaling N1.04 trillion for the period. Additionally, N315.93 billion was generated from Project Gazelle receipts for January and March 2025. NNPC’s JV royalty receivables from October 2022 to June 2025 amounted to N6.60 trillion, reflecting the cumulative impact of delayed remittances from oil companies.
Industry experts have cautioned the Federal Government against prioritizing revenue collection over creating a stable, investor-friendly regulatory environment. They warn that excessive taxation and an unfriendly business climate could drive away investment from the nation’s oil and gas sector. Energy analyst Dayo Ayoade emphasized that the NUPRC’s mandate is to regulate the upstream oil and gas sector, not to generate revenue. “If the regulator focuses too much on extracting money from companies, it could injure or even kill the goose that lays the eggs,” he said.
Petroleum engineer Bala Zaka attributed the current revenue challenges to years of “business climate hostilities” that have driven many international players out of the country. He noted that divestments by multinationals were a direct reaction to harassment, sabotage, community extortion, and rising security costs. Zaka urged the government to focus on improving security, reducing regulatory bottlenecks, and incentivizing exploration to sustainably grow oil revenue.
The NUPRC is targeting N15 trillion in revenue for the year, despite the mid-year revenue trailing the proportional benchmark. Experts believe that revenues could end the year below target unless oil output increases significantly and arrears payments accelerate. To achieve its revenue target, the commission will need to devise a strategic approach to boost oil production and revenue collection.
NUPRC Chief Executive Gbenga Komolafe stated that the commission has devised a strategy to achieve the N15 trillion revenue target. However, industry experts emphasize the need for a balanced approach that considers the interests of both the government and oil companies. They stress that a stable and investor-friendly regulatory environment is crucial for attracting investments and growing the oil and gas sector.
Nigeria’s oil revenue generation faces significant challenges, including delayed remittances from oil companies and an unfriendly business climate. To sustainably grow oil revenue, the government needs to prioritize creating a stable regulatory environment, improving security, and incentivizing exploration. The success of the NUPRC’s revenue generation strategy will depend on its ability to balance revenue collection with regulatory responsibilities and attract investments to the oil and gas sector.
