Emmanuel Addeh in Abuja
The Nigerian National Petroleum Company Limited (NNPC) slashed additions to its exploration and evaluation assets by 87.7 per cent to N78.8 billion in 2025, from N640.5 billion in 2024, according to its latest Annual Financial Report (AFS).
In the same vein, the national oil company’s gas flaring charges during the period under consideration fell by 62.2 per cent from N1.32 trillion in 2024 to N499 billion in 2025, the financial report indicated.
However, the decline in exploration funding may not be unconnected with the slowdown in the search for hydrocarbons in underexplored areas, including the Chad Basin, Benue Trough, Bida Basin and Sokoto Basin, all in the northern part of Nigeria.
Despite billions of naira committed to the programme, projects such as Kolmani, straddling Bauchi and Gombe states; drilling and appraisal activities such as the Wadi-2 exploratory well in Borno and exploration activities and seismic data gathering in Nasarawa state have yet to reach breakthrough levels.
To compound the matter. President Bola Tinubu’s Executive Order 9 of 2026, has now suspended NNPC’s collection and management of the 30 per cent Frontier Exploration Fund (FEF) and ordered that the money be remitted directly to the Federation Account for distribution among the federal, state and local governments.
On gas flaring, the group’s total charges declined to N499 billion from N1.32 trillion in 2024. The amount comprised N247.8 billion in flare fees, down from N708.6 billion, and N251.2 billion in penalties for flaring above approved limits, compared with N610.4 billion previously.
The fees are statutory charges based on limits approved by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) under Section 104 of the Petroleum Industry Act (PIA). Despite the reduction, penalties accounted for approximately half of the group’s total gas flaring charges.
At the parent company level, gas flaring charges dropped to N317.3 billion from N1.04 trillion.
The decline came as NNPC paid N11.56 trillion to settle royalties, rentals and gas flare obligations during the year, more than four times the N2.83 trillion recorded in 2024.
The reduction in outstanding liabilities also reflected a N1.18 trillion write-back of excess provisions from earlier years. Consequently, the group’s outstanding liability under the category fell by 86.2 per cent to N1.27 trillion from N9.21 trillion.
Royalty charges, however, increased by 4.1 per cent to N4.66 trillion, while the levy payable to the Niger Delta Development Commission (NDDC) rose by 29.2 per cent to N514.7 billion.
Overall, total additions across intangible asset classes fell by 88.6 per cent to N79 billion, from N692.7 billion in 2024, while additions to mineral rights were nil, compared with N46.3 billion a year earlier.
Mineral rights represent rights associated with exploring for or extracting oil and gas from specified acreage.
In Nigeria’s petroleum industry, these rights are linked to legally recognised entitlements to undertake petroleum operations, subject to applicable laws, lease terms and regulatory approvals. The absence of additions means NNPC recorded no new expenditure in that asset category during the year.
The report also showed that mineral rights valued at N16.4 billion relating to oil mining leases 64 and 66 were removed after being fully impaired. An impairment occurs when an asset’s recorded value is no longer considered recoverable under applicable accounting rules.
The report also disclosed lower spending on selected operational activities, as rig site and stimulation expenses declined to N2.9 billion from N16.5 billion earlier recorded by the national oil company. Besides, the AFS showed that allocated technical and production costs fell to N144.4 billion from N489.6 billion, while crude handling and port charges declined to N1.06 trillion from N1.52 trillion.
However, direct well expenses increased by 65.9 per cent to N4.15 trillion from N2.50 trillion, while depreciation of oil and gas properties rose by 15 per cent to N3.71 trillion. Spending on safety, environmental and pollution control activities also increased to N74.5 billion from N2.3 billion.
In the same vein, labour costs charged to the cost of sales rose more than fourfold to N254.5 billion from N59.7 billion, while insurance and security expenses increased to N213.9 billion from N182.2 billion.
Elsewhere, the NNPC statement showed that investments in subsidiaries in the parent company’s accounts declined to N6.23 trillion from N6.65 trillion, with the three refineries carried at a combined value of N2.72 trillion.
The wider group recorded weaker revenue performance, with revenue falling by 23.4 per cent to N34.52 trillion in 2025 from N45.08 trillion a year earlier. In the same vein, Anoh Gas, in which NNPC holds a 50 per cent interest, recorded a loss of N4.86 billion.