The Money Flow
An explanatory sequence — some stages are parallel obligations, not straight deductions.
- Petroleum produced
$61.13bn
Gross sales value
- Production & recoverable costs
$16.86bn
27.6% of gross value
- Government royalties
$8.09bn
13.2% of gross value
- Petroleum taxes
$16.16bn
26.4% of gross value
- Contractual allocations (JV / PSC)
$44.27bn
NNPC retained earnings
$26.56bn
- Government revenue entitlement
$50.81bn
83.1% of gross value
- Federation Account remittance
$50.81bn
- 13% derivation
$6.60bn
- Federal / State / Local distribution
$44.20bn
Stage 1 — What did Nigeria produce?
Total gross petroleum sales value
$61.13bn
Crude oil
$41.06bn
547.5m bbl/yr @ $75/bbl
Condensate
$6.57bn
91.3m bbl/yr @ $72/bbl
Natural gas
$13.50bn
2326.9 Bscf sold of 2737.5 Bscf produced
Stage 2 — How much did production cost?
Pre-fiscal economic margin
$44.27bn
Operating costs
$9.95bn
Capital recovery
$6.00bn
Transport & handling
$916.93m
Total costs
$16.86bn
Unit costs: $12/bbl crude · $10/bbl condensate · $0.9/Mscf gas
Stage 3 — What does the government charge for the resource itself?
Total government royalties
$8.09bn
Production royalty (12.5% shallow)
$5.95bn
Price-based royalty (2.5%)
$1.19bn
Gas royalty (7%)
$944.71m
Total royalties
$8.09bn
Stage 4 — What goes to oil-producing host communities?
Trust obligation
$270.00m
Prior-year qualifying OPEX
$9.00bn
Contribution rate
3%
Obligation → Host Communities Trust
$270.00m
Stage 5 — What taxes do petroleum companies pay?
Total estimated petroleum taxes
$16.16bn
Taxable base
$35.91bn
Effective rate (45%) — illustrative
$16.16bn
Total taxes
$16.16bn
Stage 6 — Who owns the remaining economic value?
Government commercial entitlement
$26.56bn
Government / NNPC share
$26.56bn
Private partners' share
$17.71bn
Cost recovery
$16.86bn
Stage 7 — How much is due to the Nigerian government?
Total government revenue due
$50.81bn
NUPRC collections (royalties)
$8.09bn
Tax authority collections
$16.16bn
Commercial entitlements (JV/PSC)
$26.56bn
Total due
$50.81bn
Stage 8 — How much reached the Federation Account?
Total petroleum revenue remitted
$50.81bn
Legally due for remittance
$50.81bn
Actually remitted
$50.81bn
Outstanding receivables
$0
Unreconciled difference
$0
Stage 9 — Who finally gets the money?
Distributable federation revenue
$44.20bn
13% derivation to producing states
$6.60bn
Federal Government (52.68%)
$23.29bn
State Governments (26.72%)
$11.81bn
Local Governments (20.6%)
$9.11bn
- OPEX
- Operating expenditure — day-to-day costs of running fields.
- CAPEX
- Capital expenditure — investment in wells, platforms and pipelines.
- HCT
- Hydrocarbon Tax — a petroleum profits tax under the PIA.
- CIT
- Companies Income Tax — the general corporate income tax.
- PPT
- Petroleum Profits Tax — the legacy pre-PIA petroleum tax.
- PSC
- Production Sharing Contract — contractor funds operations and shares output.
- JV
- Joint Venture — NNPC and partners share costs and output by equity.
- NUPRC
- Nigerian Upstream Petroleum Regulatory Commission — collects royalties.
- NNPC
- NNPC Ltd — the national oil company, a commercial entity.
- FAAC
- Federation Account Allocation Committee — shares federation revenue monthly.
- Federation Account
- The pool of federally collected revenue shared among the three tiers of government.
- Royalty oil
- Oil (or its value) set aside to pay royalties.
- Cost oil
- Oil used to recover approved PSC contractor costs.
- Tax oil
- Oil used to settle tax obligations.
- Profit oil
- What remains in a PSC after royalty, cost and tax oil — shared by contract.
All numbers are a hypothetical educational scenario, not official 2025 or 2026 figures. Rates such as terrain royalties, tax rates and the Executive Order 9 (2026) remittance changes are assumed, user-adjustable simplifications — not a legal or tax assessment. Derivation (13%) applies to the eligible revenue base only; the 52.68 / 26.72 / 20.60 split applies to the remaining pool. The host-community 3% is an operator cost and is never deducted from the Federation Account.
- Constitution of Nigeria, Section 162
- Petroleum Industry Act 2021
- NUPRC — Nigerian Upstream Petroleum Regulatory Commission
- NEITI — oil & gas industry reports
- Federal Ministry of Finance — FAAC
- Budget Office of the Federation
- NNPC Ltd reports
- Nigeria Tax Act 2025 & Tax Administration Act 2025
- Executive Order 9 of 2026 and implementation guidance