Abuja, Nigeria — August 22, 2025
The Federal Government has unveiled plans to offset an estimated ₦2.7 trillion legacy debt owed to gas companies through royalty payments, according to officials familiar with the policy framework. Details of the repayment mechanism are still being finalized, with implementation expected to be phased.
In a related development, the Nigerian National Petroleum Company Limited (NNPC Ltd) released its July 2025 Monthly Performance Report, announcing a profit after tax of ₦185 billion for the month and confirming that ₦7.965 trillion was remitted to the Federation Account in the first half of the year.
The report noted that crude oil and condensate production averaged 1.70 million barrels per day (mbpd) in July, comprising 1.40 mbpd of crude oil and 0.29 mbpd of condensates, a slight increase from June’s 1.68 mbpd. NNPC further disclosed that natural gas production rose to 7.72 billion standard cubic feet per day, with gas sales climbing to 4.98 bscfd, the highest level recorded so far this year.
On infrastructure, the company confirmed that the Ajaokuta–Kaduna–Kano (AKK) gas pipeline project is 83 percent complete, with additional contractors deployed to accelerate completion. It also reported 100 percent upstream pipeline availability during the month, indicating minimal operational disruptions.
Industry observers caution that output figures may vary depending on methodology, as OPEC’s secondary sources placed Nigeria’s crude-only production at about 1.5 mbpd in July, while the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) recently cited approximately 1.78 mbpd.
The Federal Government’s debt-offset plan and NNPC’s financial disclosures are expected to play a significant role in stabilizing the gas-to-power sector and improving fiscal inflows in the second half of the year.
