Title: Optimizing Royalty Interest Management and Its Effect on Oil and Gas Accounting Production Costs in Nigeria
Authors: JONAH Ngbomowa Moses PhD
Volume: 9
Issue: 9
Pages: 54-60
Publication Date: 2025/09/28
Abstract:
This study investigates the effect of royalty interest management strategies on the oil and gas accounting production costs in Nigeria. Specifically, it examines three key dimensions of royalty management contract structuring, payment compliance and monitoring, and revenue tracking and reporting systems and their influence on operational cost per barrel and cost efficiency index, which are vital indicators of production performance in the upstream petroleum sector. A quantitative research design was adopted, and data were collected through structured questionnaires distributed to 150 professionals in regulatory agencies and oil and gas companies, with 132 valid responses analysed. Using descriptive statistics, Pearson correlation, and multiple regression analysis, the study found that all three dimensions of royalty interest management had a significant and positive impact on production cost metrics. Contract clarity and automation of reporting systems were particularly effective in reducing cost variances and improving fiscal transparency. The findings suggest that optimizing royalty interest management is not merely a compliance requirement but a strategic cost-control mechanism in Nigeria's oil and gas industry. The study concludes that reforming royalty contract frameworks, enhancing digital revenue monitoring systems, and enforcing regulatory oversight can improve both operational efficiency and industry sustainability. It recommends policy actions focused on standardization, digitalization, and incentivisation to drive down production costs and promote accountability.