…Seeks detailed disclosure of oil asset security costs, Federation advances and petroleum subsidy obligations
The Chairman of the Alliance for Economic Research and Ethics (AERE), Dele Kelvin Oye, has called for a comprehensive investigation and public disclosure of the Nigerian National Petroleum Company Limited’s (NNPC) ₦11.2 trillion receivables from the Federation, raising concerns over the transparency of expenditure on oil and gas asset protection and other government-related financial obligations.
Oye said the amount, disclosed in NNPC’s 2025 annual report, required a detailed reconciliation to establish how much was attributable to physical security of petroleum infrastructure, advances to the Federal Government and other financial commitments.
According to the report cited by AERE, NNPC’s receivables from the Federation stood at ₦11.201 trillion as of December 31, 2025, compared with ₦8.840 trillion at the end of 2024.
In a policy analysis titled “The ₦11.2 Trillion Bodyguard: A Receivable in a Security Uniform,” Oye argued that the magnitude of the balance demanded greater transparency, particularly because it involved public resources and transactions between the national oil company and the Federation.
51 African Countries, 90 Nations Join Dangote Refinery IPO in Historic Investment Drive
NAFDAC Uncovers New Fake Goods Network Operating Inside Nigeria
He, however, cautioned against interpreting the entire ₦11.2 trillion as money spent on pipeline surveillance or security operations in 2025, explaining that the figure represented outstanding receivables accumulated under different financial arrangements.
“The ₦11.2 trillion bodyguard is not a 2025 security bill. This is the correction that matters most,” Oye stated.
“The ₦11.201 trillion figure in NNPC’s 2025 accounts is not ₦11.2 trillion spent on guards, drones or pipeline patrols during the year. It is the year-end balance of ‘other receivables from the Federation’.”
He explained that NNPC broadly classified the receivables as advances to the Federation and costs incurred in protecting oil and gas assets under a government-approved framework, without providing sufficient details to distinguish the individual components.
Oye noted that the company’s accounts recorded no energy-security expense for 2025 under the relevant disclosure, while an opening energy-security receivable of ₦8.672 trillion carried forward from 2024 was reconciled in September 2025.
According to him, the reconciliation involved offsetting the outstanding amount against royalties, taxes and dividends due to the Federation as of December 2024, contributing to a reduction in total Federation receivables from ₦17.512 trillion to ₦11.201 trillion.
He maintained that although the reconciliation provided some explanation for movements in the accounts, it did not eliminate the need for Nigerians to understand the underlying transactions and their financial implications.
“That does not end the transparency question; it finally starts it properly. A receivable from the Federation is not an invoice from a private customer. It sits at the intersection of public finance, petroleum operations and sovereign authority,” he said.
Oye consequently called for a publicly accessible reconciliation framework separating physical oil and gas asset security expenditure from supplier-of-last-resort and petrol price-under-recovery obligations, as well as advances to the Federation.
He said each category should identify the relevant legal authority, beneficiaries, supporting invoices, payment status, amounts offset against government obligations and measurable outcomes.
The AERE chairman explained that the historical energy-security classification also covered broader petroleum market obligations, including the supplier-of-last-resort arrangement under the Petroleum Industry Act.
He noted that during the regulated petrol pricing regime, under-recovery represented the difference between the actual landing cost of imported petrol and its regulated selling price.
According to him, exchange rate fluctuations could increase such obligations, although NNPC’s 2025 report did not separately quantify any foreign exchange component.
Oye also raised concerns about the company’s reporting of pipeline maintenance expenditure, noting that the specific accounting line declined from ₦149.478 billion in 2024 to ₦13.813 billion in 2025, representing a reduction of approximately 90.76 per cent.
He, however, warned that the decline should not automatically be interpreted as evidence that pipeline maintenance activities had fallen by the same proportion.
UNIPORT Graduate Shot Dead: Three Policemen Dismissed as Fourth Officer Remains at Large
EFCC Sacks 40 Staff Over Corruption, Recovers N1.23tn in Three Years
According to the analysis, NNPC’s other direct costs increased from ₦566.540 billion to ₦1.277 trillion during the period, with the broader category covering maintenance and operations involving wells, production facilities, pipelines, processing infrastructure, repairs and integrity management.
Oye said the available disclosures made it difficult to establish whether maintenance activities had been postponed, reclassified, transferred to other cost centres or undertaken more efficiently.
“So the accounts do not prove that physical maintenance collapsed by 90%. They prove that the public cannot tell, from the published categories, whether work was postponed, reclassified, embedded in another cost centre or carried out more efficiently,” he stated.
He called on NNPC to publish an asset-integrity scorecard for major petroleum pipelines, detailing planned and completed maintenance, incidents, downtime, expenditure and independent inspection results.
Beyond the receivables and maintenance concerns, Oye acknowledged significant improvements in NNPC’s reported financial performance, including a rise in profit after tax from ₦5.414 trillion in 2024 to ₦7.183 trillion in 2025.
He also highlighted the company’s reported peak crude oil and condensate production of 1.77 million barrels per day, its highest level in five years, and a declared dividend of ₦5.8 trillion.
However, the AERE chairman questioned the composition of the company’s earnings, observing that profit increased despite a decline in revenue and gross profit.
According to the figures he cited, NNPC’s revenue fell by 24 per cent to ₦34.517 trillion, while gross profit declined by approximately 20 per cent to ₦9.374 trillion.
During the same period, other income increased from ₦3.392 trillion to ₦8.416 trillion, while the impairment position shifted from a ₦753.557 billion charge in 2024 to a ₦325.432 billion reversal in 2025.
Oye said the figures raised legitimate questions about the relative contributions of core operations, accounting adjustments and non-recurring income to the company’s profitability.
“None of that makes the profit unreal. But it does make the simple victory dance incomplete,” he said.
“When a company’s profit grows while core revenue and gross profit retreat, citizens deserve to know which cash-generating operations did the lifting, which accounting estimates moved, and which one-off items may not return for an encore.”
He noted that NNPC attributed part of its other income to activities including the Trans-Forcados pipeline, crude-processing fees, miscellaneous income from joint venture operators and a write-back associated with an Amenam-Kpono stock-overlift claim.
Oye maintained that clearer reporting would enable investors, policymakers and the public to distinguish sustainable operating performance from accounting adjustments and exceptional income.
The AERE chairman further called for greater disclosure of petroleum forward-sale commitments and measurable operational outcomes, arguing that financial reporting should provide a clearer picture of the company’s obligations and infrastructure performance.
He said the national oil company needed to demonstrate not only profitability but also transparency in the management of petroleum assets, public revenues and government-related financial arrangements.
“NNPC’s 2025 accounts contain real achievements: stronger reported profit, improved production and a notable dividend declaration. They also show a financial architecture in which major public questions can still hide inside broad labels, offsets and future-delivery obligations,” Oye said.
He insisted that a transparent public accounting framework would strengthen confidence in the petroleum sector and help Nigerians assess how national oil resources were being managed.
“Nigeria does not need another acronym, another relaunch or another headline with a ribbon around it. It needs a receipt: names, dates, invoices, barrels, offsets, performance and cash,” he declared.
