The Nigerian National Petroleum Company Limited (NNPC Ltd) has reported a staggering N380 billion revenue loss for September 2025, attributed to declining crude production, oil theft, and infrastructure sabotage that continue to plague Nigeria’s oil and gas sector. The development marks one of the largest single-month revenue shortfalls in recent years, raising concerns over the impact on government finances and budgetary stability.
According to industry sources and data from the Federation Account Allocation Committee (FAAC), the loss was largely due to reduced crude oil output, which dropped below the 1.4 million barrels per day (bpd) mark during the month. This decline in production, coupled with high operating costs and the lingering effects of pipeline vandalism, significantly weakened the company’s revenue stream.
The shortfall has also affected remittances to the Federation Account, limiting the funds available for distribution among federal, state, and local governments. Analysts warn that the persistent revenue underperformance could hamper government efforts to meet its fiscal obligations and fund ongoing developmental projects.
An internal report from NNPC Ltd revealed that crude oil losses due to theft and vandalism on key pipelines, particularly in the Niger Delta, accounted for nearly 40 percent of the revenue decline. Several export terminals, including Bonny and Forcados, reportedly experienced operational disruptions due to illegal bunkering and crude tapping activities.
The report also noted that the rising cost of maintaining ageing infrastructure and the growing expenses tied to oil production logistics have worsened the company’s financial outlook. “The combination of reduced output, theft, and high operating expenditure has significantly affected our financial performance for September,” a senior NNPC official, who spoke on condition of anonymity, was quoted as saying.
Despite ongoing government efforts to curb oil theft, the menace remains a major challenge. The NNPC and security agencies have recently intensified patrols and surveillance across key pipeline corridors. However, experts argue that without addressing the root causes — including unemployment and weak community engagement — the illegal activities may persist.
The September shortfall also coincides with a dip in global oil prices, which averaged $72 per barrel during the month, down from $78 in August. The lower price environment further reduced Nigeria’s oil revenue, despite the country’s reliance on crude exports for over 70 percent of its foreign exchange earnings.
Energy analyst and Managing Partner at Phronesis Energy, Dr. Henry Adigun, said the NNPC’s revenue performance reflects deeper structural issues in the petroleum sector. “This loss highlights how vulnerable Nigeria’s oil revenue base has become. Production inefficiencies, theft, and unstable fiscal terms continue to drag down the company’s profitability,” he explained.
Adigun urged the Federal Government to accelerate reforms in the oil and gas industry, including the implementation of the Petroleum Industry Act (PIA), which seeks to enhance transparency and attract investment. “If Nigeria must meet its fiscal targets and sustain energy security, the NNPC must be restructured to operate more efficiently and profitably,” he added.
Meanwhile, the Chief Executive of NNPC Ltd, Mele Kyari, reaffirmed the company’s commitment to addressing the challenges affecting revenue generation. Speaking during a stakeholders’ meeting in Abuja, Kyari said the company was ramping up production efforts and working closely with security agencies to secure oil assets.
“We are intensifying efforts to recover production losses and improve operational efficiency. The NNPC remains focused on ensuring that every barrel produced adds value to the Nigerian economy,” Kyari said.
He disclosed that the company has begun deploying advanced surveillance technologies, including drones and satellite imaging, to monitor pipeline networks and detect illegal activities in real time. He also confirmed that the ongoing partnership with private security firms and host communities has led to the recovery of several previously vandalised pipelines.
Despite these measures, Nigeria’s oil production has continued to struggle below the OPEC quota of 1.8 million barrels per day. The low output has affected the country’s ability to maximise earnings from the recent rebound in global oil demand.
The World Bank and International Monetary Fund (IMF) have repeatedly cautioned Nigeria about the fiscal risks of overdependence on oil revenue. Both institutions have urged the government to diversify its revenue sources and improve non-oil exports to cushion against oil market volatility.
In a related development, the NNPC’s downstream arm has also been under financial pressure due to rising operational costs linked to the importation and distribution of petroleum products. Although the company has maintained that petrol subsidy has been effectively removed, analysts believe that implicit subsidies still exist due to exchange rate fluctuations and domestic pricing mechanisms.
Public finance expert Dr. Bismarck Rewane said the continued revenue shortfall could pose serious risks to Nigeria’s fiscal balance, especially given the government’s rising debt profile. “A loss of N380 billion in one month is significant. It reflects deep inefficiencies that need urgent reforms. The government must ensure that NNPC operates on purely commercial principles to remain viable,” he stated.
Rewane also warned that declining oil revenue could further weaken the naira and exacerbate inflationary pressures, as the country relies heavily on foreign exchange from oil exports to fund imports.
The Federal Government has reiterated its commitment to tackling the challenges affecting the oil sector. Minister of State for Petroleum (Oil), Senator Heineken Lokpobiri, said the administration was prioritising investments in security, exploration, and infrastructure rehabilitation to restore Nigeria’s oil production to at least 2 million barrels per day by 2026.
He expressed optimism that ongoing reforms and collaborations with host communities would yield tangible results soon. “We are confident that with renewed security efforts and investment inflows, NNPC’s revenue will recover in the coming months,” he said.
While the N380 billion loss presents a setback, stakeholders believe it could serve as a wake-up call for deeper structural reforms. Experts insist that without urgent intervention, Nigeria risks losing its competitive edge in the global oil market.
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