The Nigerian National Petroleum Company Limited (NNPCL) received ₦318.05 billion between January and August 2025 to fund frontier oil exploration, according to records from the September Federation Account Allocation Committee (FAAC) meeting.
The deductions, mandated by the Petroleum Industry Act (PIA) 2021, represent 30% of Production Sharing Contract (PSC) profits. By law, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) manages this Frontier Exploration Fund to expand oil search in under-explored basins such as Anambra, Bida, Dahomey, Sokoto, Chad, and Benue.
NUPRC’s 2025 Exploration Plan
In July, the NUPRC unveiled its 2025 Frontier Basin Exploration and Development Plan. The programme includes seismic surveys, stress-field detection, and new drilling. Planned activities feature the logging of the Eba-1 well in Dahomey, drilling of a new wildcat in Bida, and reassessment of old wells in Chad.
FAAC Data Shows Fluctuating Deductions
Analysis of FAAC records shows PSC profits reached ₦1.06 trillion in eight months, short of the ₦1.58 trillion budgeted. However, the 30% deduction was applied monthly:
- January: ₦31.77bn
- February: ₦38.30bn
- March: ₦61.49bn (sharp surge)
- April: ₦36.58bn (40% drop)
- May: ₦38.8bn
- June: ₦6.83bn (lowest so far)
- July: ₦25.34bn
- August: ₦78.94bn (highest so far)
By August, deductions for exploration reached ₦318.05bn. A parallel 30% allocation also went to NNPCL as management fees, pushing its total receipts to ₦636.1bn in eight months.
Pressure on the Federation Account
The deductions reduced inflows into the Federation Account, which received ₦424.07bn so far this year — ₦207.5bn below target. The strain has been worsened by NNPCL’s failure to remit any part of its ₦2.17 trillion interim dividends budgeted for 2025.
A FAAC subcommittee has now demanded that NNPCL submit detailed financial records of all frontier exploration projects. The deadline was September 19, but documents show the reporting exercise remains “work in progress.”