The Nigerian National Petroleum Corporation (NNPC) has been mired in corruption allegations and losing money for many years.
Despite pressure to sell it off, the government says that it can transform the NNPC into a profitable enterprise.
Nigeria is Africa's biggest oil producer, but the economy has suffered because of the declining oil price.
Can Nigeria defeat oil corruption?
Oil Minister Emmanuel Ibe Kachikwu said that the NNPC's monthly losses have rapidly declined and now stand at $15m (Â£11m).
He told an audience in the capital, Abuja, that it would soon be in profit, an NNPC statement says.
Mr Kachikwu, a former top official at ExxonMobil, was appointed to head the NNPC last year after President  Muhammadu Buhari won elections and was then also named junior oil minister.
Mr Buhari has vowed to tackle corruption in the country.
In 2013, then central bank governor Lamido Sanusi said that the NNPC had failed to account for billions of dollars of earnings.
Nigeria's government benefits from revenues from the sale of the country's oil by several private oil companies which also operate in the country.
Mr Kachikwu also announced that some oil producing countries will be meeting on 20 March to see if they can work together to end the instability in the oil price.
Nigeria has introduced foreign exchange controls and import bans in an effort to maintain the value of the currency, the naira, in the face of pressure over the declining oil price.
Nigeria's loss-making state oil giant is to be broken up into 30 "profit-making" companies, the government says.