President Bola Tinubu has issued an Executive Order (EO) to safeguard and enhance oil and gas revenues for the Federation, curb wasteful spending, eliminate duplicative structures in the sector, and redirect resources for the benefit of the Nigerian people.
According to a statement by the presidential spokesperson, Bayo Onanuga, the President signed the EO in pursuance of Section 5 of the Constitution of the Federal Republic of Nigeria (as amended).
The Executive Order is anchored on Section 44(3) of the Constitution, which vests ownership, control, and derivative rights in all minerals, mineral oils, and natural gas in, under, and upon any land in Nigeria—including its territorial waters and Exclusive Economic Zone—in the Government of the Federation.
The directive seeks to restore the constitutional revenue entitlements of the federal, state, and local governments, which were removed in 2021 by the Petroleum Industry Act (PIA).
According to Onanuga, the PIA created structural and legal channels through which substantial Federation revenues are lost via deductions, sundry charges, and fees.
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Under the current PIA framework: NNPC Limited retains 30% of the Federation’s oil revenues as a management fee on Profit Oil and Profit Gas derived from Production Sharing Contracts, Profit Sharing Contracts, and Risk Service Contracts.
Additionally, the company retains 20% of its profits for working capital and future investments.
The Federal Government considers the additional 30% management fee unjustified, as the 20% retained earnings are already sufficient to support NNPC Limited’s functions under these contracts.
Moreover, NNPC Limited also retains another 30% of profit oil and profit gas under the Frontier Exploration Fund, as stipulated in sections 9(4) and (5) of the PIA.
Onanuga noted that this fund, devoted to speculative exploration, risks accumulating large idle cash balances and encourages inefficient spending at a time when resources are urgently needed for core national priorities, including security, education, healthcare, and energy transition investments.
The EO also addresses the Midstream and Downstream Gas Infrastructure Fund (MDGIF), funded by gas flaring penalties under Section 104 of the PIA. Onanuga explained that Section 103 of the PIA already establishes a dedicated Environmental Remediation Fund, administered by NUPRC, specifically designed to rehabilitate communities impacted by upstream petroleum operations. The continuation of MDGIF payments, he said, constitutes duplication.
“All these deductions far exceed global…
Original Source: Channels Television