NNPC faces fresh scrutiny over oil licensing, production claims, transparency

The Nigerian National Petroleum Company Limited (NNPC Ltd.) is facing renewed scrutiny over its handling of oil-sector affairs, with industry stakeholders questioning the company’s response to concerns surrounding the recently concluded oil licensing round, production figures and its broader claims of transparency.

The latest controversy has placed renewed focus on the relationship between NNPC Ltd. and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the agency responsible for regulating Nigeria’s upstream petroleum industry.

At the centre of the dispute is NNPC Ltd.’s position that it has no role in the licensing process, citing provisions of the Petroleum Industry Act (PIA) 2021.

Critics, however, argue that while the NUPRC has the statutory responsibility to conduct licensing exercises, NNPC Ltd. remains a dominant commercial player whose interests are inevitably affected by decisions concerning access to the country’s oil and gas assets.

They contend that the national oil company’s commercial interests make its relationship with the licensing process a matter worthy of greater public scrutiny, even where the law assigns formal regulatory responsibility to another institution.

The latest licensing exercise has revived longstanding concerns about transparency, fairness and the possibility of preferential access in Nigeria’s petroleum sector.

NNPC Ltd.’s insistence that it is not involved in the process has done little to settle questions from some stakeholders, who argue that regulatory independence should not prevent scrutiny of how the outcome of licensing rounds could affect the company’s commercial operations.

The debate also comes at a time when the Federal Government is seeking to attract fresh investment into the oil and gas sector and improve crude production.

For investors, industry analysts and civil society groups, the credibility of licensing procedures remains critical to building confidence in the sector.

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The company has highlighted an increase in crude oil production from 1.60 million barrels per day in April 2025 to 1.67 million barrels per day in April 2026, representing a rise of about six per cent.

While the increase represents growth, critics argue that the improvement remains modest when measured against Nigeria’s substantial hydrocarbon reserves and the country’s longstanding ambition to significantly increase crude production.

They contend that production statistics should be viewed alongside persistent challenges, including crude oil theft, pipeline vandalism, infrastructure limitations and operational disruptions.

These factors have historically contributed to production losses and reduced government revenue from the petroleum sector.

According to figures attributed to NNPC Ltd., gas output increased from 7,354 million standard cubic feet per day (mmscfd) to 7,729 mmscfd, representing an increase of about five per cent.

Although the company presents the increase as evidence of progress, critics argue that the growth remains below what Nigeria could achieve given its substantial gas reserves.

They say achieving the country’s ambition of becoming a major global gas supplier would require sustained investment in gathering infrastructure, processing facilities, pipelines, domestic utilisation and export capacity.

NNPC Ltd.’s Monthly Performance Reports have been presented by the company as evidence of its commitment to transparency.

However, critics argue that publishing periodic data alone does not fully resolve questions about accountability.

They contend that meaningful transparency requires independently verifiable information, clear methodologies, comprehensive disclosures and a willingness to address unfavourable developments alongside positive performance indicators.

The controversy therefore extends beyond individual production figures to the question of how the national oil company communicates its performance to the public.

Stakeholders are increasingly demanding greater clarity on how reported figures are generated and how they compare with broader industry conditions.

Another contentious aspect of the dispute is NNPC Ltd.’s reported warning that it could take action against what it considers false or unsubstantiated claims.

While the company may legitimately challenge inaccurate information, critics argue that such warnings could have a chilling effect on legitimate scrutiny if they are perceived as an attempt to discourage criticism.

They say public institutions and companies operating in strategically important sectors should be prepared to respond to difficult questions with evidence and detailed explanations.

The latest controversy comes amid broader concerns about Nigeria’s oil and gas industry, including production losses, investment uncertainty, infrastructure constraints and governance challenges.

NNPC Ltd. has undergone significant restructuring following the implementation of the Petroleum Industry Act, with the company transitioning into a commercial entity under the new framework.

The transformation has been accompanied by repeated assurances that the restructured company would operate with greater commercial discipline, transparency and efficiency.

But critics argue that those claims will ultimately be judged not by corporate statements alone but by measurable improvements in production, revenue generation, operational efficiency and public accountability.

For Nigeria, the stakes are significant. Petroleum remains a major source of government revenue and foreign exchange, while the country is simultaneously seeking to attract investment and expand its role in global energy markets.

The growing debate over NNPC Ltd.’s licensing position, production figures and disclosure practices therefore goes beyond a disagreement over statistics.

It raises a broader question about whether the reforms introduced under the PIA are delivering the transparency and accountability promised to Nigerians and investors.

Until the company provides clearer answers to the concerns being raised by stakeholders, the gap between NNPC Ltd.’s narrative of transformation and public perception is likely to remain a subject of intense scrutiny.