Thomas Dennerby's ladies held the hosts until the 79th minute when VAR ruled in favour of France to take their penalty twice.
Goalkeeper Chiamaka Nnadozie was adjudged to have come off her line early which gave Wendie Renard an opportunity to retake the penalty and score after her first attempt hit the post.
The defeat left Nigeria in third spot in Group A with three points from three matches.
They now await their fate to progress to the next round as one of the four best losers in the group stage. However, Oliseh was pleased with the spirit shown by Thomas Dennerby's ladies.
"Extremely proud of our Super Falcons of Nigeria vs France at the World Cup, Oliseh tweeted.
"These girls gave it everything against a French side cheered on by a nearly full stadium and a doubtful retaken penalty.
"I am sad, disappointed, but proud of these girls."
Extremely proud of our Super falcons of Nigeria vs France at the world cup. These girls gave it everything against a French side cheered on by a near full stadium & a doubtful retaken penalty. I am sad,disappointed, but proud of these girls! pic.twitter.com/dv4TAGDYVn— Sunday Oliseh (@SundayOOliseh) June 17, 2019