PicNews
The Nigerian National Petroleum Company Limited (NNPCL) has secured N318.05 billion to fund new oil exploration in the country’s inland basins between January and August 2025. This funding is part of the Frontier Exploration Fund, established under the Petroleum Industry Act (PIA) of 2021, which mandates that 30% of profits from Production Sharing Contracts (PSCs) be channeled into exploring under-tapped oil basins.
The monthly allocations to the frontier fund varied significantly, ranging from N6.83 billion in June to N78.94 billion in August. Despite the fluctuations, the automatic deductions accumulated N318.05 billion into NNPCL’s control for exploration in new oil basins by the end of August. Similarly, NNPCL’s management fees mirrored the frontier deductions exactly, bringing the company’s total allocation for exploration and management to N636.1 billion for the first eight months of the year.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) oversees the fund through an escrow account and released its 2025 Frontier Basin Exploration and Development Plan in July. The plan details activities such as seismic surveys, wildcat drilling, and stress-field detection across targeted basins, including logging and testing of the Eba-1 well in the Dahomey basin, new wildcat drilling in the Bida basin, reappraisal of Wadi wells in the Chad basin, and reassignment of Ebeni-1 drilling in the Benue basin.
The funding has sparked debate, with some experts arguing that the 30% allocation is too high and unsustainable. Ademola Adigun, Chief Executive Officer of AHA Strategies, described the allocation as “unrealistic and too high” and suggested that it should not exceed 10%. Professor Dayo Ayoade, an energy law scholar, also cautioned against hasty amendments to the PIA, stressing that the law took nearly two decades of negotiations and compromises before it was passed.
President Bola Tinubu has directed a review of deductions and revenue retention practices by Nigeria’s major revenue-generating agencies, including NNPCL, to boost public savings and enhance spending efficiency. The move aims to unlock resources for growth and development.
Source –Punch
