The Nigerian National Petroleum Company Limited (NNPCL) has received ₦318.05 billion between January and August 2025 to finance new oil exploration across the country’s frontier basins, according to documents from the September Federation Account Allocation Committee (FAAC) meeting.
The funds represent 30% of Production Sharing Contract (PSC) profits, which the Petroleum Industry Act (PIA) 2021 mandates must be set aside each month for frontier basin development. The Frontier Exploration Fund is targeted at under-explored areas such as Anambra, Bida, Dahomey, Sokoto, Chad, and Benue.
Exploration Plan and Projects
In July 2025, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) unveiled a Frontier Basin Exploration and Development Plan, detailing upcoming seismic surveys, stress-field detection, data integration, and wildcat drilling.
Projects outlined include:
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Logging and testing of the Eba-1 well in the Dahomey basin.
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Drilling of a new wildcat well in the Bida basin.
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Reappraisal of Wadi wells in Chad.
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Reassignment of Ebeni-1 drilling in Benue.
NUPRC Chief Executive, Gbenga Komolafe, stated that the results would determine future exploratory drilling and asset de-risking in line with statutory requirements.
FAAC records show that PSC profits in 2025 totaled ₦1.06 trillion by August — far short of the budgeted ₦1.58 trillion, leaving a gap of over ₦518 billion.
Despite the shortfall, the statutory 30% deduction was applied consistently, yielding ₦318.05 billion for exploration. Monthly allocations fluctuated sharply, from ₦6.83 billion in June to a peak of ₦78.94 billion in August.
Key monthly deductions:
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January: ₦31.77bn
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February: ₦38.30bn
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March: ₦61.49bn
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April: ₦36.58bn
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May: ₦38.80bn
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June: ₦6.83bn
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July: ₦25.34bn
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August: ₦78.94bn
NNPCL’s management fees, also pegged at 30% of PSC profits, mirrored these deductions exactly — bringing its total receipts for the period to ₦318.05 billion. Combined with the exploration fund, the company secured ₦636.1 billion in just eight months.
The Federation Account, entitled to 40% of PSC profits, also suffered from the volatility. It received ₦424.07 billion year-to-date, compared to a budgeted ₦631.57 billion, creating a shortfall of over ₦207 billion.
This revenue strain has been worsened by the non-performance of NNPCL’s interim dividend line, budgeted at ₦271.18 billion per month (₦2.17 trillion YTD). So far, no remittances have been made.
Government Scrutiny
The deductions have drawn the attention of FAAC. A special subcommittee has been set up to review the 30% frontier allocation, holding meetings with NNPCL, NUPRC, and the Central Bank of Nigeria.
The growing tension highlights the delicate balance between funding future energy exploration and meeting immediate revenue needs for federal, state, and local governments.
