Energy Experts Call for Stronger Oversight and Tougher Measures to Protect Upstream Revenue

Table of Contents

• Call for Vigilance in the Energy Sector
• Recent Revenue Figures
• Increased Remittances
• Challenges Facing the Sector
• Strong Performance Indicators
• Expert Opinions

Energy sector specialists have emphasized the need for ongoing vigilance, stricter monitoring of oil production volumes, precise measurement systems, and unwavering compliance with royalty regulations. They assert that these steps are essential for maintaining the progress made by the policy reforms at the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

The specialists highlighted that the recent revenue figures released by the Federation Account Allocation Committee (FAAC) are the outcome of intentional tightening of fiscal controls, which have enabled sustained high remittances despite variations in production levels.

This appeal follows the announcement of new records indicating that the commission generated N8.79 trillion for the federation account from January to October 2025.

Records from the November 2025 FAAC meeting disclosed that NUPRC remitted N873.10 billion in October alone, marking a 17.67 percent increase from September’s N741.99 billion, attributed to stronger royalty enforcement, improved data reconciliation, and enhanced monitoring of upstream operations.

FAAC documents revealed over N1.02 trillion in NNPC Joint Venture and Production Sharing Contract royalty receivables, in addition to N835.69 billion from Project Gazelle.

The commission also confirmed that, following presidential approval to eliminate inherited NNPC arrears as of December 31, 2024, it cleared $1.42 billion and N5.57 trillion in legacy obligations.

However, experts pointed out that despite these advancements, challenges such as low outputs, infrastructure limitations, crude theft, and fluctuations in global prices continue to hinder efforts to stabilize the sector. They noted that October collections of 72.47 percent of the N1.204 trillion monthly budget reflect these ongoing issues.

Despite these setbacks, the experts observed that the commission achieved strong performances across various revenue streams, including N807.08 billion in oil and gas royalties, a 65 percent increase in rental income, and gas flare penalties exceeding budgeted targets at 105.52 percent.

Dr. Ifeanyi Okonkwo, a public affairs analyst and former advisor at the National Assembly, stated in an interview with DAILY POST that the latest revenue figures indicate a deliberate tightening of administrative and fiscal controls at the commission.

“These numbers show that the NUPRC under Komolafe has finally adopted the discipline that the upstream sector has been lacking for years,” he remarked.

“There is now a clear commitment to transparency, monthly reconciliation, and the resolution of historical leakages. The fact that the commission is maintaining high remittances despite fluctuating production levels indicates that the regulator is no longer hesitant or reactive. It is acting like a regulator that understands the significance of its mandate and is determined to enforce it.”

Energy economist Dr. Hauwa Ibrahim described the performance as a reassuring indicator in a challenging year for the global oil market.

“The October figures illustrate that even within a constrained production environment, a disciplined regulatory framework can still yield strong results for the federation,” she stated.

“What we are witnessing is the initial emergence of structural stability in the upstream sector, driven by firmer compliance systems and a more proactive regulatory stance. While the figures still reflect the sector's fragility, especially regarding production volumes, a regulator that provides clarity, consistency, and predictable enforcement contributes to a more resilient entire value chain. This is the direction in which NUPRC is now heading.”

Petroleum engineer Mike Osamudiamen noted that the commission’s management of inherited NNPC debts represents one of the most significant interventions in the industry this year.

“For decades, Nigeria’s upstream fiscal environment has been clouded by unresolved obligations, disputed receivables, and unclear accounting practices,” he explained.

“By bringing much-needed clarity to the financial records and writing off obligations that were legally extinguished, NUPRC has restored credibility to the federation’s financial documentation. This certainty is crucial not only for government planning but also for operators, investors, and auditors who depend on accurate data.”

Eze Chidiebere Paul

I'm dedicated to creating high-quality content that informs, inspires, and delights. If you have any questions or suggestions, don't hesitate to get in touch. Happy reading!