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NNPCL secures N318bn to fund new oil exploration

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The Nigerian National Petroleum Company Limited has received N318.05bn between January and August 2025 for frontier oil exploration, findings by The PUNCH have shown.

This is according to documents from the September 2025 Federation Account Allocation Committee meeting obtained by The PUNCH.

The deductions represent 30 per cent of Production Sharing Contract profits, which are automatically set aside each month for exploration in inland basins.

The Petroleum Industry Act 2021 created the Frontier Exploration Fund, which mandates that 30 per cent of profits from NNPC’s Production Sharing Contracts be channelled into oil search across under-explored basins, including Anambra, Bida, Dahomey, Sokoto, Chad and Benue.

Regulations also require the Nigerian Upstream Petroleum Regulatory Commission to manage the fund through an escrow account and issue an annual Frontier Basin Exploration and Development Plan.

Further findings by The PUNCH showed that the NUPRC in July 2025 unveiled a Frontier Basin Exploration and Development Plan detailing proposed seismic surveys, stress-field detection, data integration, and wildcat drilling across basins in Benin Dahomey, Anambra, Bida, Sokoto, Chad, and Benue.

The plan outlined work such as logging and testing of the Eba-1 well in the Dahomey basin, drilling of a new wildcat in Bida, reappraisal of Wadi wells in Chad, and reassignment of Ebeni-1 drilling in Benue.

Signed by the Chief Executive of the NUPRC, Gbenga Komolafe, the document stated that the outcome of these activities would determine further de-risking of assets and exploratory drilling in line with statutory requirements.

Analysis of the FAAC documents by The PUNCH further showed that PSC profits so far this year amounted to N1.06tn, below the budgeted N1.58tn, creating a shortfall of N518.76bn.

Despite this gap, the statutory 30 per cent deduction for frontier exploration was consistently applied, month after month, producing an accumulated N318.05bn by August.

The monthly trend reveals the volatility of the fund. In January, N31.77bn was deducted into the frontier line, when PSC profits came in at N105.91bn.

The February deduction rose to N38.30bn from a profit of N127.67bn, representing a 20.6 per cent increase on the January inflow.

March provided the first big surge, with N61.49bn allocated to frontier exploration from profits of N204.96bn, a jump of 60.5 per cent on February’s figure.

April, however, saw deductions ease back to N36.58bn as profits slid to N121.93bn, a 40.5 per cent drop compared with March.

In May, the fund received N38.8bn, only slightly higher than April’s contribution, reflecting profit of N129.33bn.

June delivered the lowest allocation so far this year, just N6.83bn, after profits collapsed to N22.77bn. That represented an 82.4 per cent fall from May.

The flow recovered somewhat in July, with N25.34bn transferred into the fund from profits of N84.48bn.

In August, the line shot up again to its highest level so far this year. With PSC profit surging to N263.13bn, the fund received N78.94bn, more than three times the July amount and twelve times June’s contribution.

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Across the eight months, the monthly allocations to the frontier fund varied sharply, from as little as N6.83bn in June to as much as N78.94bn in August.

Yet by the end of the period, the automatic deductions had steadily accumulated N318.05bn into NNPCL’s control for exploration in new oil basins.

The same 30 per cent rule also applied to NNPCL’s management fees, which mirrored the frontier deductions exactly.

In January, NNPCL booked N31.77bn; in February, N38.30bn; in March, N61.49bn; in April, N36.58bn; in May, N38.8bn; in June, N6.83bn; in July, N25.34bn; and in August, N78.94bn.

This brought the company’s management fees to N318.05bn in the first eight months of the year.

Based on the figures, the oil firm got a total of N636.1bn for frontier exploration and management fees.

The PUNCH further observed that the Federation Account, entitled to 40 per cent of PSC profits, also experienced the same volatility.

It received N42.364bn in January and N51.067bn in February. March brought N81.985bn, the strongest inflow of the first quarter.

April saw a fall to N48.772bn, followed by N51.730bn in May. June gave the lowest figure of the year at N9.110bn.

In July, receipts rose again to N33.792bn, before climbing steeply to N105.250bn in August, the largest monthly payout so far.

Year-to-date, the Federation Account has received N424.071bn from PSC profits, still well behind the budgeted N631.573bn, leaving a shortfall of N207.502bn.

The FAAC documents confirmed that while PSC profits generated just over N1.06tn this year, the deductions left the Federation Account with significantly less to share among the three tiers of government.

The pressure has been compounded by the non-performance of NNPCL’s interim dividend line.

Budgeted at N271.184bn per month, or N2.169tn year-to-date, the company has not remitted any amount so far, leaving a gaping hole in the federation’s revenue plan.

The issue has prompted closer scrutiny. The FAAC documents record that a special subcommittee was set up to examine the 30 per cent frontier deductions.

The committee met with NNPCL, the Nigerian Upstream Petroleum Regulatory Commission, and the Central Bank of Nigeria.

At the meeting, NNPCL presented details of exploration activities carried out in all the inland basins from 1999 to date and outlined its intended activities for 2025.

Committee members, however, demanded greater transparency, insisting that NNPCL provide detailed financial records of projects undertaken before and after the Petroleum Industry Act was passed.

The company was directed to submit the information by September 19, 2025, but the documents noted that the assignment was still “work in progress.”

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The Director-General of the Budget Office of the Federation, Tanimu Yakubu, earlier said Nigeria had lost nearly 60 per cent of its gross oil revenue to deductions under the Petroleum Industry Act 2022, which allocates 30 per cent to the NNPCL as management fees and another 30 per cent to the Frontier Exploration Fund.

He made this statement at a stakeholders’ engagement in Abuja, organised by the Office of the Accountant-General of the Federation, to review progress and challenges in implementing the extended 2024 capital budget and the 2025 capital budget under the Bottom-Up Cash Planning Policy.

“Once the Act came into effect without new revenue sources to replace the loss, we lost a sizable part of what used to fund 80 per cent of public expenditure,” Yakubu said.

He added that oil revenues had performed even worse in the first half of 2025 due to low prices and output shortfalls.

Yakubu said he had begun moves in the National Assembly to amend the PIA to recover part of the lost revenue.

During the Federal Executive Council meeting in Abuja last month, President Bola Tinubu directed a review of deductions and revenue retention practices by Nigeria’s major revenue-generating agencies.

The move aims to boost public savings, enhance spending efficiency, and unlock resources for growth.

The agencies include the Federal Inland Revenue Service, the Nigeria Customs Service, the Nigerian Upstream Petroleum Regulatory Commission, the Nigerian Maritime Administration and Safety Agency, and the Nigerian National Petroleum Company Limited.

Tinubu specifically called for a reassessment of NNPC’s 30 per cent management fee and 30 per cent frontier exploration deduction under the Petroleum Industry Act.

He tasked the Economic Management Team, chaired by Edun, to present actionable recommendations to the FEC on the optimal way forward.

The President said the directive was part of efforts to sustain reforms that have dismantled economic distortions, restored policy credibility, enhanced resilience, and bolstered investor confidence.

However, the Petroleum and Natural Gas Senior Staff Association of Nigeria, as well as the Nigeria Union of Petroleum and Natural Gas Workers, rejected the Federal Government’s plans to divest significant stakes in Joint Venture assets managed by the Nigerian National Petroleum Company Limited.

The two unions warned that the move to allegedly amend the Petroleum Industry Act and remove the running of oil and gas from the NNPCL could endanger the country’s economic stability, weaken its oil industry, and jeopardise the welfare of workers.

They stated that the policies are dangerous and capable of bankrupting the Nigerian National Petroleum Company Limited.

The oil workers urged President Bola Tinubu to intervene and halt the plan.

Experts seek deductions

Speaking with The PUNCH on Wednesday, the Chief Executive Officer of AHA Strategies, who is an oil and gas expert, Mr Ademola Adigun, has faulted the 30 per cent allocation of Production Sharing Contract profits to frontier oil exploration, describing it as “unrealistic and too high.”

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Reacting to revelations that NNPCL received N318.05bn for frontier exploration in just eight months without paying dividends to the Federation Account, Adigun said the current arrangement was not justifiable under prevailing economic conditions.

“The money allocation is unrealistic, too high. It is not well used now,” he stated.

He backed President Bola Tinubu’s call for a review of deductions by major revenue agencies, including NNPCL, insisting that more revenue should flow into the Federation Account. “I don’t think it’s worth it to continue this way,” Adigun added.

The industry expert recommended that the frontier allocation be cut drastically, proposing that it should not exceed 10 per cent.

“Maximum of 10 per cent is what I would suggest,” he said.

However, an energy law scholar at the University of Lagos, Professor Dayo Ayoade, has cautioned against a hasty amendment of the Petroleum Industry Act, stressing that the law took nearly two decades of negotiations and compromises before it was passed.

Reacting to the revelations on frontier deductions, he said, “It took us 19 years of reform to agree on the PIA, and the PIA is actually a delicate balance of a lot of compromises. The Frontier Exploration Fund, in many ways, was like a counterbalance to the Host Community Trust Fund.”

While acknowledging Nigeria’s urgent revenue needs, Ayoade insisted that NNPCL must give a detailed account of the money it has collected for frontier exploration.

“It was one of the biggest problems I had with the PIA because I knew that 30 per cent of PSC profits going into just exploration was too high. I would rather that exploration be liberalised and put in the hands of the private sector,” he explained.

He suggested that private investors willing to take the risk of exploring frontier basins should be offered strong tax and operational incentives, instead of government using public funds through NNPCL.

“There should not be any NNPCL spending government money on this project,” Ayoade added.

The scholar also warned that the current funding model posed risks to fiscal federalism and undermined NNPCL’s commercial credibility.

“The funding structure is not really sustainable, and that is the truth. NNPCL is not really a commercial company. All it does is act as a middleman for government and collect money it has not really earned,” he argued, adding that the company should be judged by profits generated from its own fields and operations rather than from joint ventures or production sharing arrangements.

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X offers changes to blue checkmarks after $138m EU fine

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Elon Musk’s X has offered to make changes to its blue checkmark for “verified” accounts, a European Commission spokesman said Friday, after the platform received a 120-million-euro ($138 million) fine.

The European Union slapped the fine in December on X for breaking its digital rules, including through the “deceptive design” of its blue checkmark.

“X has submitted remedies in relation to its blue checkmark. The commission will now carefully assess the proposed remedies,” EU spokesman for digital affairs Thomas Regnier said.

He did not provide details about what X had submitted.

X risked periodic financial penalties had it not submitted any remedy.

“We have to value the fact that after a constructive exchange with the company, the company has taken its obligation seriously and has submitted us remedies,” Regnier told reporters in Brussels.

When contacted by AFP, X did not provide comment immediately.

Blue checkmarks, long free of charge at what was previously known as Twitter, were intended to signal the identity of certain users — such as celebrities, journalists and politicians — had been verified in an effort to build trust in the platform.

But after Musk bought the platform, he allowed users to pay to get one.

X in February announced it had filed an appeal with the EU’s top court against the fine, which was the first ever under the bloc’s Digital Services Act (DSA).

But Regnier said the commission still expected X to pay it by Monday, and to provide further remedies on other breaches by April 28.

The fine came under a probe started in December 2023.

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That investigation continues as EU regulators study how X tackles the spread of illegal content and information manipulation.

X has often been in the EU’s sights.

The 27-nation bloc in January began another DSA probe into the company’s AI chatbot Grok’s generation of sexualised deepfake images of women and minors after a global outcry.

AFP

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Akwa Ibom to drive large-scale farming with equipment leasing firm

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Akwa Ibom State Government has said it will soon inaugurate its Agric Equipment Leasing Company as part of efforts to promote large-scale mechanised farming in the state.

Governor Umo Eno disclosed this while fielding questions from Government House correspondents shortly after inspecting the progress of work at the company’s facility located at Ekpri Nsukara in Uyo on Thursday.

In a statement obtained from the Government House Press Unit on Friday, the governor commended the contractor for the progress recorded at the project site.

“There is a lot of improvement in the work done here to get the company kick-started in earnest.

“The contractor has given her word that the project will soon be inaugurated, and I hold her to that,” he said.

Eno explained that the essence of the project is to encourage farmers to embrace large-scale farming in order to boost productivity, increase earnings and ensure food sufficiency in the state.

“The farming season is here again, and we are putting everything in place for this project to function optimally. There are over 25 tractors with tracking devices and two low-bed trucks in readiness for the agriculture programme.

“What we intend to do here is to lease these equipment to our farmers across the state at subsidised rates so that they can utilise it for improved farming productivity.

“These farming equipment range from ploughs to harvesters and other implements that will help improve farming output,” he said.

The governor noted that the initiative forms part of his administration’s strategy to mechanise farming methods in the state in order to achieve large-scale crop production and increase farmers’ profits.

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Speaking on the government’s tree-crop revolution programme, Eno assured that the initiative would commence once the rainy season sets in, noting that such crops thrive better during the rainy season.

“The nursery for palm seedlings has already been established, and the necessary enumeration of farmers has been conducted across the state.

“Within the next two weeks, the seedlings will be distributed to farmers for planting across the state,” he added.

The governor urged farmers to take advantage of the various agricultural programmes introduced by the government to enhance large-scale farming output and improve economic growth in the state.

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Forum dismisses claims of N210tn missing in NNPC accounts

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A coalition of professionals under the Ajiyya Solidarity Forum has dismissed allegations that about N210tn is missing from the accounts of the Nigerian National Petroleum Company Limited (NNPC).

Addressing journalists on Thursday, ASF National Coordinator, Usman Hamza, described the claim as “mathematically impossible” and politically motivated.

The group’s position is in response to a recent claim by the Chairman of the Senate Public Accounts Committee, Ahmed Wadada, that the NNPC Limited could not account for about N210tn.
Hamza said such a figure was misleading.

“Senator Wadada’s claim of N210tn ‘unaccounted for’ funds is a mathematical impossibility designed to shock the public,” Hamza said.

He argued that the claim did not align with Nigeria’s fiscal reality, noting that the country’s entire 2024 national budget stood at about N28.7tn.

“To suggest that a single entity ‘lost’ nearly eight times the national budget is an insult to the intelligence of Nigerians,” he added.

The forum also condemned threats of arrest warrants against former officials of NNPCL, including former Chief Financial Officer, Umar Ajiya, describing the move as part of a coordinated campaign of political blackmail.

According to the group, the Senate committee may have misinterpreted financial figures by combining accrued expenses and receivables in a way that falsely suggests missing funds.

“We consider that the committee has erroneously ‘netted’ N103tn in accrued expenses, largely joint venture liabilities, with N107tn in receivables owed to NNPCL. Labelling money owed to a company as ‘missing funds’ is a professional travesty,” Hamza stated.

During the ongoing review of the financial records of Nigerian National Petroleum Company Limited, the Senate Public Accounts Committee, chaired by Wadada, had raised concerns over alleged discrepancies running into trillions of naira.

The ASF maintained that the allegations ignored the broader financial and structural reforms undertaken by the national oil company in recent years.

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Furthermore, Hamza mentioned that the tenure of former CFO Ajiya coincided with the transition of the national oil firm into a commercial entity under the Petroleum Industry Act, a reform that ended decades of opaque financial reporting.

“Mr Ajiya’s tenure saw the transition of NNPC into a commercially driven entity and the publication of the first audited financial statements in 43 years,” the forum stated.

ASF defended the N5.9bn cost incurred during the transition process of NNPC to NNPC Limited, saying it covered complex legal and structural reforms required to transform the former state corporation into a limited liability company.

The forum warned that politicising the Senate’s oversight role could damage Nigeria’s credibility in the eyes of international investors.

“Using the Senate’s hallowed chambers to pursue personal vendettas damages Nigeria’s reputation with international investors,” Hamza said.

The forum further called on the leadership of the Senate to institute an independent ethics investigation into what it described as an alleged demand for bribes linked to the ongoing oversight process.

“We call on the Senate leadership and its Ethics Committee to investigate the alleged bribe demand connected to this oversight exercise,” he said.

He urged lawmakers to stop what he described as the harassment of officials who have already submitted several technical responses to the committee.

“Public accountability should be pursued through a sober forensic review of facts, not through sensational claims and phantom numbers,” he added.

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