NNPCL's N11.2trn pipeline security spend draws scrutiny after N7.2trn profit

Nigerian National Petroleum Company Limited spent N11.2 trillion on pipeline surveillance and other receivables from the federation in 2025, a figure that has unsettled energy experts because it is larger than the N7.2 trillion profit the company reported for the same period.

The state oil firm released its 2025 audited financial statement last week. Profit after tax rose 33 per cent to N7.2 trillion, from N5.4 trillion in 2024. Revenue, however, fell 24 per cent to N34.5 trillion.

What the N11.2 trillion covers

The report booked N11.2 trillion under "pipeline surveillance and other receivables from federation." NNPCL tied it to advance payments to the federation and costs incurred to secure the country's oil and gas assets.

The company said no money went to "energy security," the line it uses for fuel subsidy spending. In 2024, NNPCL spent N7.1 trillion on energy security and a combined N17.5 trillion on pipeline security.

Atiku wants a breakdown

Atiku Abubakar, presidential candidate of the African Democratic Congress, demanded that President Bola Ahmed Tinubu's administration publish details of the N11.2 trillion. He argued the sum must be scrutinised because about N3.1 trillion went to the nation's defence budget allocation.

Experts question the value

Prof. Wumi Iledare, a petroleum economist, said on Arise that the debate should centre on what the country got for the money. "Energy security, what do we mean by energy security? You are talking in terms of the value derived from that N11.2 trillion. The magnitude must be questioned," he said. "So the basic question then is, what did you derive from that N11.2 trillion? From a petroleum economic point of view, you could decide to spend money to produce an additional barrel or decide to spend money to make sure there is continuous flow of production from the asset that you have."

Barr. Ameh Madaki, Managing Partner of BBH Consulting and Convener of the Public Interest Advocacy Network, called the spending excessive. He questioned the value of the pipeline surveillance network and alleged the government could be diverting funds ahead of the 2027 elections.

"What is the value of all the network of pipelines in the Niger Delta that NNPC will claim to use N11.2 trillion on pipeline surveillance?" he asked. "How can you ask criminals to protect critical national assets? These levels of brigandage can only thrive in Nigeria, where criminality holds sway and impunity has been elevated to statecraft."

Chuks Emeka, an oil and gas consultant, said securing oil and gas infrastructure is necessary but warned against reading the N11.2 trillion as fresh cash spent solely on pipeline security in 2025. He noted the audited accounts report it as receivables from the Federation, covering advances and costs incurred on behalf of government.

"Nigerians are entitled to demand a detailed breakdown of these costs. How much actually went into surveillance? How much went to security operations? How much went to community-based surveillance and other interventions? What contracts were awarded, to whom, and what measurable results were achieved?" he asked.

Emeka said improved pipeline security appears to have lifted crude production, with NNPCL reporting average output of about 1.71 million barrels per day in 2025, up from the low levels recorded in 2022. He still wants the model to be transparent, independently auditable and economically efficient.

"At a time when Nigerians are facing significant cost-of-living pressures, every trillion naira committed by the government must be subjected to rigorous scrutiny. Security is necessary, but security spending should not become a blank cheque," he said.