The Nigerian National Petroleum Company Limited’s receivables from the Federation fell by ₦6.31tn in 2025 following the reconciliation of energy security costs owed to the company by the Federal Government.
NNPC disclosed this in Note 24.2 of its 2025 audited financial statements released last Wednesday.
The company’s total receivables from the Federation stood at ₦11.20tn at the end of 2025, compared with ₦17.51tn recorded in 2024.
The reduction followed the removal of ₦8.67tn in energy security cost receivables from the outstanding balance after the amount was netted against royalties, taxes and dividends due to the Federation.
According to the financial statements, NNPC had an energy security cost receivable of ₦8.67tn at the beginning of 2025. The amount was subsequently reconciled with relevant government agencies and offset against government obligations.
NNPC said the reconciliation exercise was concluded in September 2025.
“During the year, no energy security expense was recognised (2024: ₦7.13 trillion).
Following a reconciliation exercise with relevant government agencies, the Energy Security Cost receivables were netted off against royalties, taxes, and dividends due as at December 2024. The reconciliation exercise was concluded in September 2025,” the company said.
The accounts also showed that NNPC did not recognise any energy security expense in 2025, compared with ₦7.13tn recorded in 2024.
Despite the reconciliation, other receivables from the Federation increased during the year.
NNPC’s other receivables rose from ₦8.84tn in 2024 to ₦11.20tn in 2025, representing an increase of about ₦2.36tn, or 26.7 per cent.
The company said the receivables were linked to advance payments to the Federation and costs incurred in protecting the country’s oil and gas assets.
“This is under the framework of approval between the Government of Nigeria and the Group to incur security costs and charge the same to the Federation,” NNPC stated.
The disclosure highlights the continued financial cost of protecting Nigeria’s petroleum infrastructure amid crude oil theft, pipeline vandalism and other disruptions affecting oil production.
NNPC’s energy security expenses had increased from ₦4.84tn in 2023 to ₦7.13tn in 2024 before the outstanding receivable was reconciled in 2025.
The company’s arrangement with the Federal Government allows it to incur approved costs for the protection of oil and gas assets and subsequently charge such costs to the Federation.
NNPC, however, clarified in its latest accounts that the ₦11.20tn receivable recorded at the end of 2025 should not be interpreted as fresh energy security spending of ₦11.20tn during the year.
Rather, the amount represents receivables from the Federation remaining after the ₦8.67tn energy security cost receivable was reconciled and offset against royalties, taxes and dividends due to the government.
The development is positive from an accounting perspective because the reconciliation reduced NNPC’s outstanding receivables from the Federation. However, it does not represent a fresh ₦8.67tn revenue inflow to the government, as the amount was offset against royalties, taxes and dividends.
The continued ₦11.2tn in receivables also shows that significant funds remain tied up in government obligations.
More broadly, the figures highlight the heavy economic cost of protecting Nigeria’s oil infrastructure. Persistent oil theft and pipeline vandalism increase security expenses, disrupt production and reduce government revenue.
The key economic challenge, therefore, is for the government to curb oil-sector insecurity, raise production and prevent the accumulation of new obligations to NNPC.
