The Nigerian National Petroleum Company Limited (NNPCL) has received ₦318.05bn between January and August 2025 to fund new frontier oil exploration, documents from the September 2025 Federation Account Allocation Committee (FAAC) meeting have revealed.
According to the records obtained by The PUNCH, the amount represents 30 per cent of Production Sharing Contract (PSC) profits automatically set aside each month under the Petroleum Industry Act 2021 for oil search across inland basins.
The Frontier Exploration Fund, established by the Act, mandates that 30 per cent of NNPCL’s PSC profits be channelled into exploring under-developed basins such as Anambra, Bida, Dahomey, Sokoto, Chad and Benue. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) manages the fund through an escrow account and issues an annual Frontier Basin Exploration and Development Plan.
In July 2025, the NUPRC unveiled the latest plan, detailing seismic surveys, stress-field detection, data integration, and wildcat drilling across the basins. Activities listed include logging and testing of the Eba-1 well in the Dahomey Basin, drilling of a new wildcat in Bida, reappraisal of Wadi wells in Chad, and reassignment of Ebeni-1 drilling in Benue.
Despite PSC profits falling short of the budgeted ₦1.58tn to ₦1.06tn this year, the statutory 30 per cent deduction for frontier exploration was consistently applied, resulting in ₦318.05bn by August.
Monthly allocations fluctuated sharply: ₦31.77bn in January, ₦38.30bn in February, ₦61.49bn in March, ₦36.58bn in April, ₦38.8bn in May, a low of ₦6.83bn in June, ₦25.34bn in July, and a record ₦78.94bn in August.
NNPCL also booked the same amount, ₦318.05bn, as management fees within the first eight months, bringing its total receipts for exploration and fees to ₦636.1bn.
However, the Federation Account, entitled to 40 per cent of PSC profits, received ₦424.07bn in the same period, far below the budgeted ₦631.57bn. The non-remittance of NNPCL’s interim dividends, projected at ₦2.17tn year-to-date, has further deepened the revenue shortfall.
FAAC documents show that a special subcommittee has been set up to scrutinise the 30 per cent frontier deductions. The committee has met with NNPCL, the NUPRC and the Central Bank of Nigeria to review exploration activities from 1999 to date and NNPCL’s intended programmes for 2025.
