NNPC Earns N890.8bn in Management Fees, Frontier Funds in 11 Months

Emmanuel Addeh in Abuja

The Nigerian National Petroleum Company Limited (NNPC) raked in a combined N890.8 billion from management fees and Frontier Exploration Fund (FEF) in the 11 months to November 2025, according to official figures submitted to the Federation Accounts Allocation Committee (FAAC).

The accruals drawn from Production Sharing Contract (PSC) operations, underscored the continued centrality of upstream oil and gas activity to Nigeria’s public finances, even amid fiscal pressures and volatile crude market conditions.

Under the Petroleum Industry Act (PIA), the NNPC is entitled to specific deductions from production sharing contract profits. The management fee is intended to cover the company’s costs and responsibilities as the concessionaire and manager of PSC operations on behalf of the federation.

Besides, it compensates the national oil company for technical, commercial and administrative oversight, including contract administration, monitoring of contractors, and coordination of upstream activities under PSC arrangements.

On the other hand, FEF is dedicated exclusively to financing geological and geophysical surveys, appraisal and exploration activities in Nigeria’s frontier basins, which are areas considered underexplored and higher risk. These include inland basins such as the Chad, Sokoto, Bida, Anambra and Benue troughs, among others.

Documents from the December 15 FAAC meeting seen by THISDAY showed that the company’s management fee, fixed at 30 per cent of PSC profits, amounted to N445.4 billion between January and November.

In the same vein, an identical N445.4 billion accrued to the FEF, which is also funded with 30 per cent of PSC profits and earmarked for exploration activities in frontier basins across the country. Combined, the two revenue lines accounted for 60 per cent of total PSC profit distribution over the period.

Further analysis indicated that overall PSC profit total distribution for the 11 months stood at about N1.48 trillion, reflecting cumulative monthly inflows for the months under consideration.

However, while the figure remained substantial, it fell short of the year-to-date budget benchmark, resulting in a negative variance of roughly N686.3 billion, highlighting the persistent gap between projected and realised oil revenues.

A closer look at the monthly trend showed that PSC profit inflows fluctuated significantly during the year. In January, PSC profit stood at about N105.9 billion, rising to N127.7 billion in February and increasing significantly to N204.9 billion in March. April recorded N121.9 billion, while May came in at N129.3 billion.

But the mid-year months were comparatively weaker, with June at N22.8 billion and July at N84.5 billion. August improved to N263.1 billion, one of the strongest months in the period, it was N275.4 billion in September, but fell sharply to N36.8 billion in October. November closed at about N112.3 billion.

Since the management fee and frontier exploration fund are directly tied to PSC profit performance, their monthly accruals followed a similar pattern. In January, each component contributed N31.8 billion. February delivered N38.3 billion apiece, while March rose to N61.5 billion.

April’s contribution was N36.6 billion for each line, increasing slightly to N38.8 billion in May. The weakest month was June, at just N6.8 billion each, before July rebounded to N25.3 billion. August recorded N78.9 billion per line, followed by N82.6 billion in September. October dropped sharply to N11.0 billion, with November closing at N33.7 billion for each item.

In contrast to the revenues accruing directly to NNPC-controlled accounts, the federation’s share from PSC operations was lower. The Federation Account, which receives 40 per cent of PSC profit, recorded N593.9 billion in the 11 months to November. This also underperformed against the budget target, with a negative variance of about N274.6 billion, reflecting the same structural pressures affecting overall oil revenue inflows.

Beyond PSC receipts, the FAAC document also highlighted the absence of any interim dividend remittance from NNPC to the Federation Account throughout the period under reference.

The annual budget for NNPC calendarised interim dividend to FAAC was set at N3.25 trillion, with a monthly benchmark of N271.18 billion. However, no remittance was recorded, leaving a 100 per cent shortfall of the expected inflow. In all, the data pointed to persistent pressure on oil-derived revenues, despite modest improvements in some months, reinforcing ongoing concerns about federation revenue adequacy and predictability.