NNPCL Gets ₦318bn for Frontier Oil Exploration Amid Calls for Review

The Nigerian National Petroleum Company Limited (NNPCL) has received ₦318.05bn between January and August 2025 to fund oil exploration in frontier basins, according to documents from the September Federation Account Allocation Committee (FAAC) meeting.

The Petroleum Industry Act (PIA) 2021 mandates that 30% of Production Sharing Contract (PSC) profits be set aside monthly for exploration in underdeveloped basins, including Anambra, Bida, Sokoto, Chad, Benue, and Dahomey.

Findings showed PSC profits stood at ₦1.06tn in the eight-month period, below the budgeted ₦1.58tn. Despite this shortfall, the 30% deductions for frontier exploration were applied consistently, generating the ₦318.05bn now under NNPCL’s control.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in July rolled out a Frontier Basin Development Plan, outlining seismic surveys, wildcat drilling, and well reappraisals across multiple basins. The projects include logging the Eba-1 well in Dahomey, drilling in Bida, and reappraising the Wadi wells in Chad.

However, the deductions have raised concerns. The FAAC documents noted that while NNPCL has collected funds for exploration and management fees, no interim dividend has been remitted to the Federation Account this year—creating a gaping hole in government revenue.

Industry experts have also criticised the 30% allocation as excessive. Oil analyst Ademola Adigun described the figure as “unrealistic and too high,” suggesting it should be cut to a maximum of 10%.

Similarly, Prof. Dayo Ayoade of the University of Lagos warned against hasty amendments to the PIA but insisted that NNPCL must provide detailed accounts of how the money is being used.

The revelations come as President Bola Tinubu has ordered a review of revenue retention by major government agencies, including NNPCL, to free up more funds for the Federation Account.

Oil unions, however, have warned against stripping NNPCL of its current powers, saying it could destabilise the oil sector and threaten workers’ welfare.

For now, the debate continues over whether frontier oil exploration should remain a government-backed project or be opened up to private investors willing to take the financial risks.