NNPCL under scrutiny over N11.2trn pipeline security spending amid hardship

Energy experts have raised serious questions over the Nigerian National Petroleum Company Limited, NNPCL, N11.2 trillion spending on pipeline surveillance and security, as contained in its 2025 audited financial statement.

Recall that last week, NNPCL released its audited 2025 financial statement.

The state-owned oil firm declared that its Profit After Tax (PAT) rose by 33 per cent to N7.2 trillion from N5.4 trillion in 2024. However, its revenue declined by 24 per cent to N34.5 trillion.

Part of the report showed that NNPCL spent N11.2 trillion on “pipeline surveillance and other receivables from federation,” relating to “advance payments to the federation and costs incurred to secure the country’s oil and gas assets.”

Although NNPCL said there was no money spent on “energy security,” which it referred to as expenditure on fuel subsidy, the N11.2 trillion spent on pipeline security has continued to generate controversy.

This comes as the N11.2 trillion expenditure exceeded the N7.2 trillion PAT recorded by NNPCL during the period under review.

Recall that in 2024, NNPCL spent N7.1 trillion on energy security and a combined figure of N17.5 trillion on pipeline security.

Atiku demands explanation

The presidential candidate of the African Democratic Congress, Atiku Abubakar, in a statement, demanded that President Bola Ahmed Tinubu’s administration provide Nigerians with details of the N11.2 trillion expenditure.

According to him, the N11.2 trillion should be subjected to scrutiny because about N3.1 trillion was spent on the nation’s defence budget allocation.

Apply professional scepticism to N11.2tn pipeline security spending – Iledare tells NNPCL 

However, energy expert and petroleum economist, Prof. Wumi Iledare, in an interview on Arise, explained that the question about the N11.2 trillion should be about the value the country derived from the expenditure.

“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. And those are professional scepticism that NNPC is willing to look at.

“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,” he said.

Also In separate interviews with DAILY POST, other energy experts, including the Managing Partner of BBH Consulting and Convener of the Public Interest Advocacy Network (PIAN), Barr. Ameh Madaki, and Chuks Emeka, an oil and gas consultant and public affairs analyst, provided fresh perspectives on the controversy surrounding the NNPCL’s N11.2 trillion spending.

On his part, Ameh described the spending as excessive and questioned the value of the pipeline surveillance system, alleging that the government could be using it to divert funds ahead of the 2027 general elections.

He said, “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?

“Every discerning Nigerian knows that this unaccountable government is stashing funds away for the 2027 elections and massive vote-buying under the guise of a criminal pipeline surveillance system which has nothing to offer.

“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,” he said.

Also speaking, Emeka said the security of Nigeria’s oil and gas infrastructure was necessary but stressed the need for transparency and accountability over the amount being committed to the exercise.

“My position is that the security of Nigeria’s oil and gas infrastructure is absolutely necessary.

“We cannot afford a situation where pipeline vandalism, crude oil theft and attacks on critical infrastructure destabilise the Niger Delta, discourage investment and deprive the country of much-needed revenue.

“We must also be careful with the interpretation of the N11.2 trillion figure. From the 2025 audited accounts, it is reported as receivables from the Federation, covering advances and costs incurred on behalf of the government, including the protection of oil and gas assets.

“It should therefore not simply be presented as N11.2 trillion in fresh cash spent solely on pipeline security in 2025.

“That clarification notwithstanding, 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 queried. 

Emeka noted that improved pipeline security appeared to have contributed to increased crude oil production.

He continued that “There is evidence that improved pipeline security has contributed to increased crude production. NNPC says average production rose significantly from the very low levels recorded in 2022, reaching about 1.71 million barrels per day in 2025.

“So, I would not argue against spending money to secure our pipelines. The issue is whether we are getting commensurate value for the money being committed.

“Nigeria needs a security model that protects the Niger Delta, keeps our production infrastructure operational and gives host communities a genuine stake in protecting these assets. But that model must also 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.

“The question Nigerians should be asking is not simply, ‘Why are we spending money to secure our pipelines?’ It is: ‘How much are we spending, who is receiving the money, what exactly are we paying for, and what measurable value is Nigeria getting in return?'”.