President Bola Tinubu has issued an executive order for direct remittance of oil and gas revenues to the Federation Account.
The Special Adviser to the President on Information and Strategy, Bayo Onanuga, announced this in a statement issued on Wednesday.
Onanuga said Tinubu signed the order to safeguard and enhance oil and gas revenues for the federation, curb wasteful spending, eliminate duplicative structures in the sector of the national economy, and redirect resources for the benefit of Nigerians.
Onanuga stated that the President signed the order in pursuance of Section 5 of the Constitution of the Federal Republic of Nigeria (as amended).
According to him, the Executive Order was anchored on Section 44(3) of the Constitution, which vested ownership, control, and derivative rights in all minerals, mineral oils, and natural gas in, under, and upon any land in Nigeria, including its territorial waters and Exclusive Economic Zone, in the Government of the Federation.
Onanuga noted that the directive sought to restore the constitutional revenue entitlements of the federal, state, and local governments, which were taken away in 2021 by the Petroleum Industry Act (PIA).
Onanuga said the Executive Order aims to resolve, among others, the duplicative 30 per cent deduction for Profit Sharing arrangements by addressing overlapping and redundant provisions across all relevant laws and regulatory instruments under the PIA framework and NNPC Limited’s governing structure.
According to him, the objective is to eliminate unjustified multiple layers of deductions that erode revenues that ought to accrue to the federation account, enabling the three tiers of government to pursue critical national priorities.
Onanuga said Tinubu has identified structural concerns regarding the continued role of NNPC Limited as a concessionaire under Production Sharing Contract arrangements, adding that the existing framework, which allows the company to influence operating costs while simultaneously functioning as a commercial entity, creates potential competitive distortions and undermines its transition into a fully commercial operator as envisioned under the PIA.
The presidential spokesman said: “The Executive Order, therefore, introduces immediate measures to curb leakages, enhance transparency, eliminate duplicative structures, and reposition NNPC Limited strictly as a commercial enterprise, while safeguarding the Federation’s interests.
“In rolling out the order, the President affirmed that the reforms are of urgent national importance, given their implications for national budgeting, debt sustainability, economic stability, and the overall well-being of Nigerians.
“President Tinubu noted that his administration will also undertake a comprehensive review of the Petroleum Industry Act in consultation with relevant stakeholders to address identified fiscal and structural anomalies.”
Onanuga said following the Presidential Executive Order, which had been officially gazetted, the NNPC Limited would no longer collect and manage the 30% Frontier Exploration Fund.
Onanuga noted that the NNPC Limited would ensure that the 30% profit from oil and gas from production sharing, profit sharing, and risk service contracts currently earmarked for the frontier exploration fund was henceforth transferred to the federation account.
He stated: “NNPC Limited will no longer be entitled to the 30% management fee on profit oil and profit gas revenues, which should go to the federation account.
“In the same vein, all operators/contractors of oil and gas assets held under a production sharing contract shall, from the date of the Executive Order, which is February 13, 2026, pay Royalty Oil, Tax Oil, Profit Oil, Profit Gas, and any other interest howsoever described which is due to the government of Nigeria.
