NNPC Limited’s receivables from the Federation declined by ₦6.31 trillion in 2025, following the reconciliation of energy security costs owed to the company by the Federal Government.
The company disclosed this in Note 24.2 of its 2025 audited financial statements released last Wednesday.
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A review of the statement showed that total receivables from the Federation stood at ₦11.20 trillion at the end of 2025, compared with ₦17.51 trillion in 2024.
Receivables from the Federation are amounts NNPC says the federal government owes the company for costs incurred or payments made on the government’s behalf. A major component is “energy security costs”—money NNPC incurred to protect Nigeria’s oil and gas assets, which the government was expected to bear.
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The statement breakdown clarifies that the ₦11.2 trillion posted does not mean NNPC spent ₦11.2 trillion on security in 2025. However, the figure is the amount recorded as receivable from the federation at year-end after the reconciliation.
The decline in federal government receivables, compared with 2024, followed the removal of ₦8.67 trillion in energy security cost receivables from the outstanding balance after netting against royalties, taxes, and dividends due to the Federation.
The financial statements showed that NNPC had an energy security cost receivable of ₦8.67 trillion at the beginning of 2025. However, after reconciling with relevant government agencies, the amount was offset against government obligations.
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The report said the reconciliation exercise concluded in September 2025.
The company said it recognised no energy security expense in 2025, compared with ₦7.13 trillion in 2024.
“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,” NNPC said under note 24.2.2 of the statement.
Other Federation receivables rise
While the reconciliation cleared the energy security balance, NNPC’s other receivables from the Federation increased substantially.
The accounts showed that other receivables rose from ₦8.84 trillion in 2024 to ₦11.20 trillion in 2025, representing an increase of about ₦2.36 trillion, or 26.7 per cent.
The company said these receivables relate to advance payments to the Federation, as well as costs NNPC 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,” the financial statements said.
The disclosure is significant because it shows that, although the specific energy security cost balance was reconciled, NNPC continued to carry substantial amounts owed by the Federation.
The figures also highlight the financial burden associated with securing Nigeria’s petroleum infrastructure.
Oil theft and pipeline vandalism have remained major challenges to Nigeria’s oil and gas industry, causing substantial revenue losses, production disruptions, and higher costs to secure and maintain petroleum infrastructure.
In recent years, the cost of securing these pipelines has remained elevated. In its report, NNPC’s energy security expense had risen from ₦4.84 trillion in 2023 to ₦7.13 trillion in 2024, before the outstanding receivable was subsequently reconciled in 2025.
The company’s arrangement with the federation allows it to incur costs to protect oil and gas assets and subsequently charge those costs to the government.
This includes the broader challenge of protecting petroleum infrastructure from crude oil theft, pipeline vandalism and other disruptions that have historically affected production and government revenue.
The latest accounts explicitly differentiated between energy security expenses recognised in a particular year and energy security-related receivables carried on the balance sheet.
Importantly, the ₦11.20 trillion recorded in 2025 should not be described as ₦11.2 trillion of fresh energy security spending during the year. Rather, the figure represents other receivables from the federation after reconciling the ₦8.67 trillion energy security cost receivable.
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The NNPC statement did not clearly break down the items that make up these other receivables.
The company only stated that: “Other receivables from the federal government relate to advance payments to the federation and the security costs incurred in protecting the oil and gas assets,” the statement noted.
The development also comes as NNPC reported improved crude oil production in 2025, attributing part of the improvement to better pipeline availability and measures to tackle oil theft.
NNPC reported a profit after tax of ₦7.2 trillion in 2025. The figure is about a 33.3 per cent increase from ₦5.4 trillion in 2024, despite lower revenue from declining oil prices and reduced petroleum product sales.
The statement indicated that crude oil and condensate production reached a five-year peak of 1.77 million barrels per day, while domestic gas supply rose to a three-year high of 7.2 billion standard cubic feet per day.
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