Business

NNPCL secures N318bn to fund new oil exploration

Published

5 months ago

September 25, 2025

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.

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.”

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.”

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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Business

Lagos enforces 5% tax on gaming winnings

Published

23 hours ago

February 21, 2026

Newsbreak365_Admin

The Lagos State Government has begun enforcing a five per cent withholding tax on gaming winnings from licensed gaming platforms operating within the state.

The Chief Executive Officer of the Lagos State Lotteries and Gaming Authority, Are Bashir, made this known in a public notice issued on Friday.

He stated that the policy, which takes immediate effect, applies to players’ net winnings and is to be deducted at the point of payout.

Bashir directed all licensed gaming operators in the state to comply immediately with the new tax framework in line with existing Nigerian tax laws and regulatory directives governing the gaming industry.

According to the notice, the five per cent deduction will be automatically withheld before winnings are paid to players and remitted to the Lagos State Internal Revenue Service as the statutory tax authority.

Bashir said the initiative is part of the state’s wider efforts to improve tax compliance, transparency and accountability in the fast-growing gaming sector.

“The measure forms part of Lagos’ broader drive to strengthen tax compliance, transparency, and accountability in the rapidly expanding gaming sector,” the notice read.

He said under the new arrangement, players are required to provide their National Identification Number (NIN) in line with Know Your Customer (KYC) regulations.

Bashir clarified that all deductions and remittances will be handled strictly by licensed gaming operators in accordance with regulatory requirements, adding that players will receive their winnings net of the statutory deduction, with proper records maintained to ensure transparency.

He further noted that the withholding tax deducted will serve as a tax credit to the player.

“All licensed gaming operators in Lagos State have now been formally directed to commence the deductions with immediate effect,” the notice said.

Bashir reiterated that the policy is aimed at ensuring effective regulation of the gaming industry while aligning both operators and players with existing tax obligations in the state.

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Business

Customs hand over seized N40.7m petrol to NMDPRA

Published

2 days ago

February 20, 2026

Newsbreak365_Admin

The Comptroller-General of Customs, Adewale Adeniyi, on Friday handed over 1,650 jerrycans of Premium Motor Spirit, worth N40.7 million, to the Nigerian Midstream and Downstream Petroleum Regulatory Authority for further investigation.

Addressing journalists at the handover ceremony held at the Customs Training College in Ikeja, Adeniyi said the seized fuel was intercepted at various locations, including Badagry, Owode, Seme, and other axes within Lagos State.

Represented by the National Coordinator of Operation Whirlwind, Deputy Comptroller-General Abubakar Aliyu, Adeniyi said the contraband was intercepted over the past nine weeks.

“In the space of nine weeks, our operatives intensified surveillance and enforcement across critical border communities. A total of 1,650 jerrycans of 25 litres each were seized along notorious smuggling routes, including Adodo, Seme, Owode Apa, Ajilete, Idjaun, Ilaro, Badagry, Idiroko, and Imeko. The total duty-paid value of the PMS is N40.7 million,” Adeniyi said.

He added that three tankers used to transport the fuel were carrying 60,000, 45,000, and 49,000 litres respectively, totalling 154,000 litres of PMS.

According to Adeniyi, the interception was the result of intelligence-driven operations and the vigilance of Operation Whirlwind in safeguarding Nigeria’s economy and energy security.

He explained that the transportation and movement of petroleum products are governed by regulatory frameworks and standard operating procedures designed to prevent diversion, smuggling, hoarding, and economic sabotage.

“These items contravened the established Standard Operating Procedures of Operation Whirlwind,” Adeniyi said, emphasising that such violations undermine government policy, distort market stability, and deprive the nation of critical revenue.

He warned that border corridors such as Owode, Seme, and Badagry remain sensitive economic arteries. “These routes have historically been exploited for illegal cross-border petroleum movement. Under our watch, there will be no safe haven for economic sabotage,” he said.

Adeniyi said the handover to NMDPRA reflects inter-agency collaboration. “While Customs enforces border control and anti-smuggling mandates, NMDPRA regulates distribution and ensures compliance with downstream laws. This collaboration ensures due process, transparency, and regulatory integrity,” he said.

Representing NMDPRA, Mrs. Grace Dauda said the agency ensures that petroleum products produced in Nigeria are consumed domestically. “It is unfortunate that some businessmen attempt to smuggle the product out of the country. The public must work together to stop economic sabotage,” she said.

Operation Whirlwind is a special tactical enforcement operation launched by the Nigeria Customs Service in 2024 to combat cross-border smuggling of petroleum products, particularly PMS, and other contraband that threaten Nigeria’s economic security. It was established in response to a surge in illegal fuel diversion across the country.

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Business

Stocks drop, oil rises after Trump Iran threat

Published

2 days ago

February 20, 2026

Newsbreak365_Admin

Most Asia equities fell and oil prices rose on Friday after Donald Trump ratcheted up Middle East tensions by hinting at possible military strikes on Iran if it did not make a “meaningful deal” in nuclear talks.

The remarks fanned geopolitical concerns and cast a pall over a tentative rebound in markets following an AI-fuelled sell-off this month.

Traders are also looking ahead to the release of US data later in the day that will provide a fresh snapshot of the world’s top economy.

A slew of forecast-beating figures over the past few days have lifted optimism about the outlook but tempered expectations for more interest rate cuts.

The US president told the inaugural meeting of the “Board of Peace”, his initiative to secure stability in Gaza, that Tehran should make a deal.

“It’s proven to be over the years not easy to make a meaningful deal with Iran. We have to make a meaningful deal otherwise bad things happen,” he said, as he deployed warships, fighter jets and other military hardware to the region.

He warned that Washington “may have to take it a step further” without any agreement, adding: “You’re going to be finding out over the next probably 10 days.”

Israeli Prime Minister Benjamin Netanyahu earlier warned: “If the ayatollahs make a mistake and attack us, they will receive a response they cannot even imagine.”

The threats come days after the United States and Iran held a second round of Omani-mediated talks in Geneva as Washington looks to prevent the country from getting a nuclear bomb, which Tehran says it is not pursuing.

The prospect of a conflict in the crude-rich Middle East has sent oil prices surging this week, and they extended the gains Friday to sit at their highest levels since June.

Equity traders were also spooked.

Hong Kong fell as it reopened from a three-day break, while Tokyo, Sydney, Wellington and Bangkok were also down. However, Seoul continued to rally to a fresh record thanks to more tech buying, with Singapore, Manila and Mumbai also up.

City Index market analyst Matt Simpson said a strike was not certain.

“At its core, this looks like pressure and leverage rather than a prelude to invasion,” he wrote.

“The US is pairing military readiness with stalled nuclear negotiations, signalling it has credible strike options if talks fail. That doesn’t automatically translate into boots on the ground or a regime-change campaign.

“While military assets dominate headlines, diplomacy is still in motion. The fact talks are continuing at all suggests both sides are still probing for a diplomatic off-ramp before tensions harden further.”

Shares in Jakarta slipped even after Trump and Indonesian President Prabowo Subianto reached a trade deal after months of wrangling.

The accord sets a 19 percent tariff on Indonesian goods entering the United States. The Southeast Asian country had been threatened with a potential 32 percent levy before the pact.

Jakarta also agreed to $33 billion in purchases of US energy commodities, agricultural products and aviation-related goods, including Boeing aircraft.

– Key figures at around 0700 GMT –

Tokyo – Nikkei 225: DOWN 1.1 percent at 56,825.70 (close)

Hong Kong – Hang Seng Index: DOWN 0.7 percent at 26,508.98

Shanghai – Composite: Closed for holiday

West Texas Intermediate: UP 0.9 percent at $67.05 per barrel

Brent North Sea Crude: UP 0.9 percent at $72.27 per barrel

Euro/dollar: DOWN at $1.1756 from $1.1767 on Thursday

Pound/dollar: DOWN at $1.3448 from $1.3458

Euro/pound: DOWN at 87.42 pence from 87.43 pence

Dollar/yen: UP at 155.17 yen from 155.07 yen

New York – Dow: DOWN 0.5 percent at 49,395.16 (close)

London – FTSE 100: DOWN 0.6 percent at 10,627.04 (close)