The Nigerian National Petroleum Company Limited (NNPCL) has received ₦318.05 billion between January and August 2025 earmarked for frontier oil exploration, according to minutes from the September 2025 Federation Account Allocation Committee (FAAC) meeting.
These funds are drawn from the 30% share of Production Sharing Contract (PSC) profits, which by law are automatically diverted each month into the Frontier Exploration Fund to support oil and gas exploration in Nigeria’s lesser‑explored inland basins.
Under the Petroleum Industry Act 2021, this 30% allocation is mandatory, targeting basins including Anambra, Bida, Dahomey, Sokoto, Chad, and Benue. The Act also mandates that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) administer the fund via an escrow account and publish an annual Frontier Basin Exploration and Development Plan.
In July 2025, NUPRC released its plan, which includes proposals for seismic surveys, stress‑field mapping, data integration, and wildcat drilling across various basins. The plan also calls for work on the Eba‑1 well in Dahomey, a new wildcat in Bida, reappraisal of Wadi wells in Chad, and reassignment of Ebeni‑1 drilling in Benue. Signed by NUPRC’s chief executive, Gbenga Komolafe, the document states that the outcomes would guide further exploration and de‑risking activities.
Analysis of the FAAC reports shows that total PSC profits for the period stood at ₦1.06 trillion, falling short of the budgeted ₦1.58 trillion, leaving a ₦518.76 billion shortfall. Despite that, the 30% frontier deduction was consistently applied, yielding the ₦318.05 billion figure by August.
Monthly allocations varied wildly:
| Month | PSC Profit (₦) | Frontier Deduction (₦) |
| January | 105.91 bn | 31.77 bn |
| February | 127.67 bn | 38.30 bn |
| March | 204.96 bn | 61.49 bn |
| April | 121.93 bn | 36.58 bn |
| May | 129.33 bn | 38.80 bn |
| June | 22.77 bn | 6.83 bn |
| July | 84.48 bn | 25.34 bn |
| August | 263.13 bn | 78.94 bn |
The lowest monthly deduction was ₦6.83 billion in June, while the highest was ₦78.94 billion in August. Over the eight months, NNPCL also accrued an equivalent ₦318.05 billion in management fees, bringing its combined receipts (exploration + fees) to ₦636.10 billion.
Meanwhile, the Federation Account entitled to 40% of PSC profits also saw significant volatility. It received ₦424.071 billion year‑to‑date, well below the ₦631.573 billion expected, leaving a ₦207.502 billion gap.
Compounding the fiscal strain, NNPCL has failed to remit any interim dividends, despite a budgeted target of ₦271.184 billion per month. To investigate, FAAC established a special subcommittee involving NNPCL, NUPRC, and the Central Bank of Nigeria (CBN). During meetings, NNPCL presented its historical and planned exploration activities. It was instructed to provide detailed project records by September 19, 2025, though the documents say compliance is still in progress.
At a separate stakeholders’ session, Tanimu Yakubu, Director-General of the Budget Office, remarked that Nigeria is losing nearly 60% of gross oil revenue to the dual 30% deductions mandated under the PIA. He said the timing of the law’s implementation without compensatory new revenues has hampered public expenditure funding. Yakubu revealed that he is pushing amendments to the PIA in the National Assembly to restore revenue flows.
At a recent Federal Executive Council (FEC) meeting, President Bola Tinubu ordered the review of deductions and revenue retention policies across key agencies, including NNPCL. He specifically mandated a reassessment of the 30% management fee and 30% frontier exploration deductions as part of broader fiscal reforms.
Unions representing oil and gas workers strongly opposed possible changes, warning that divesting NNPCL’s authority or altering its mandate could threaten the country’s economic stability and jeopardize workers’ welfare.
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