• Laments weakness of institutions to challenge hurtful Presidential orders
• Says Executive Order nullifies provisions of PIA

Sopuruchi Onwuka

Nigeria’s top petroleum industry workers union, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), has called on President Bola Ahmed Tinubu to urgently withdraw his lasts Executive Order that essentially drained the financial capacity of the Nigerian National Petroleum Company (NNPC) Limited to drive growth in the industry.

President of PENGASSAN, Comtrade Festus Osifo, told newsmen in Lagos on Thursday that the president was misled into signing the orders which, according to him, clashes directly with provisions of the existing Petroleum Industry Act (PIA) and signals policy instability before the international investment community.

With the new Executive Order, Comrade Osifo stated, President Tinubu has actively nullified provisions in an Act of the National Assembly while Nigerian legislators and the Attorney General of the federal remain docile. He noted that the Executive Order has reintroduced uncertainty in the Nigerian petroleum industry policy sphere thereby sending disturbing signals to global investment community at a time Nigeria is locked in keen competition for global capital.

He accused those close to the president of using Executive Orders to cause distortions in the industry, pointing out that the president has until recently been an advocate of stable fiscal and policy climate for the energy sector.

While acknowledging that Executive Orders could be used to address urgent issues in the sector, Comrade Osifo was vehement that such orders must not stand in direct conflict with the provisions of the law.

Reckless use of Executive Orders, he argued, signals that the president could nullify or disable the laws of the National Assembly with impunity. He lamented that such a situation could shake investor confidence in the operating environment and make operators lose faith in the PIA.

President Bola Tinubu

Comrade Osifo declared that the new Executive Order has sent dangerous signals that investments made under the cover of the PIA are now vulnerable.

On the key issues upon which the Executive Order was premised, Comrade Osifo pointed out that the assumptions of cash flux to NNPC from Production Sharing Contracts (PSCs) are bogus, arguing that the national oil company was not receiving as much as 30 percent revenues accruing from PSCs.

He also pointed out that the Frontier Exploration Fund was never in the custody of NNPC Limited. He stressed that the president must have been misled into assumptions that NNPC Limited as drawing too much funds from petroleum industry operations.

In decrying political interference in the operations of the national oil company, PENGASSAN called on the president to allow the new management and board of experts currently running NNPC Limited the free hands they need for efficient and successful operations in line with international best practices.

He said PENGASSAN is raising its voice against the Executive Order because of its wider implication on the industry, the economy and the welfare of Nigerian people. He declared that the association is convinced that the petroleum industry must be protected from undue political interference to enable it continue sustaining the national economy.

The demand by PENGASSAN came after President Tinubu ordered the Nigerian National Petroleum Corporation Limited (NNPC Limited) to immediately relinquish control some portions of oil and gas revenues to the Federation Account.

President Tinubu’s media aide had on Wednesday declared a new Executive Order signed under Section 5 of the federal constitution directing NNPC Limited to give up control and management of the Frontier Exploration Fund retained as 30 percent of its operating profit.

He directed that the revenues retained in the Frontier Exploration Fund must now be transferred to the Federation Account.

He also directed that the NNPC will no longer retain the 30 percent management fee on profit oil and profit gas; adding that all operators under Production Sharing Contracts must pay Royalty Oil, Tax Oil, Profit Oil, Profit Gas, and any other government entitlements directly into the Federation Account, effective February 13, 2026 when the executive order was gazetted.

The President also raised concerns about NNPC Limited’s dual role as both a concessionaire and a commercial operator under Production Sharing Contracts, noting that the arrangement creates conflicts and undermines the company’s transition into a fully commercial entity as intended by the PIA.

According to the president, gas flare penalties will no longer be paid into the Midstream and Downstream Gas Infrastructure Fund (MDGIF); and would instead go straight to the Federation Account.

In the Executive Order, President Tinubu also directed that all spendings from the MDGIF must comply strictly with public procurement laws.

In the Executive Order, President Tinubu raised a joint project team to coordinate integrated upstream and midstream petroleum operations.

An implementation committee has been set up, including the Minister of Finance, the Attorney-General, the Minister of Budget and National Planning, the Minister of State for Petroleum Resources (Oil), the Chairman of the Nigeria Revenue Service, and other key officials. The Budget Office will serve as secretariat.

The presidential Executive Order is premised on the assumption that NNPC Limited retains 30 percent of profit oil and profit gas as a management fee on Production Sharing Contracts, Profit Sharing, and Risk Service Contracts.

It also recognizes that NNPC Limited controls another 30 percent of profit oil and gas stashed in the Frontier Exploration Fund under Sections 9(4) and (5) of the PIA.

Oracle Intelligence reports that the Frontier Exploration Fund is currently in the custody of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) which functions as the regulator of the industry and the nation’s exploration and production acreage lease administrator.

The president who is also the Minister of Petroleum Resources argues that NNPC Limited already keeps 20 percent of its profits for working capital and future investments.

The Executive Order, according to the government, comes in realization that more than 66 percent of Nigeria’s oil and gas income is being diverted through deductions and special funds created under the Petroleum Industry Act (PIA). The government argues that the layers of deductions go beyond global norms and significantly reduce available cash in the Federation Account for distribution to federal, state, and local governments.

Presidential Spokesman, Bayo Onanuga, stated that the order is also grounded in Section 44(3) of the Constitution, which vests ownership and control of all minerals, oil, and gas resources in the Federal Government.

Comrade Osifo dismissed all the justifications advanced by Mr Onanuga as undue interference that lacks basic facts, rational to the gullible and vulnerable before the law. He noted that quick financial gains targeted in the Executive Orders would leave devastating long-term impact on the country and the domestic economy.

He said the PENGASSAN has scheduled meetings with sister unions and wider industry on the next line of action should the president fail to heed the call to withdraw the latest Executive Order which he described as inimical to the Nigerian petroleum industry and the wider economy.