FG Allocates N318bn to NNPPCL to Fund New Oil Exploration

FG Allocates N318bn to NNPPCL to Fund New Oil Exploration.
Critics call 30% allocation excessive, urge review of PIA provisions.
FG orders review of deductions to boost transparency and revenue.

The Nigerian National Petroleum Company Limited (NNPCL) has received N318.05bn between January and August 2025 for frontier oil exploration, according to documents from the September Federation Account Allocation Committee (FAAC) meeting.

The funds, deducted automatically as 30 per cent of Production Sharing Contract (PSC) profits, were set aside for exploration in inland basins under the Frontier Exploration Fund created by the Petroleum Industry Act (PIA) 2021. Target basins include Anambra, Bida, Sokoto, Chad, Benue, and Dahomey.

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EKO HOT BLOG reports that records show wide fluctuations in monthly allocations. January saw N31.77bn, February N38.30bn, and March peaked at N61.49bn. The lowest inflow came in June with N6.83bn, before surging to N78.94bn in August, the highest this year. In total, PSC profits for the period stood at N1.06tn, below the budgeted N1.58tn, creating a N518.76bn shortfall.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has already unveiled a Frontier Basin Exploration and Development Plan, detailing seismic surveys, new drilling, and appraisal of existing wells. The outcome, according to NUPRC Chief Executive Gbenga Komolafe, will guide future de-risking and drilling campaigns. NNPCL Gets N318bn to Fund New Oil exploration

However, the arrangement has attracted criticism. Oil and gas expert Ademola Adigun described the 30 per cent allocation as “unrealistic and too high,” urging that it be cut to 10 per cent. Similarly, Professor Dayo Ayoade of the University of Lagos warned against government over-reliance on NNPCL, suggesting that exploration should be liberalised and driven by private investors through incentives rather than public funds.