NNPCL Allocates N318bn for Oil Exploration in Frontier Basins

From January to August 2025, the Nigerian National Petroleum Company Limited (NNPCL) has channeled N318.05 billion into frontier oil exploration, according to Federation Account Allocation Committee (FAAC) records from September 2025.

Legal Framework

Under the Petroleum Industry Act 2021, 30% of Production Sharing Contract (PSC) profits are reserved for the Frontier Exploration Fund.

This supports drilling in under-explored inland basins like Anambra, Bida, Dahomey, Sokoto, Chad, and Benue.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) oversees the fund via an escrow account and issues yearly exploration plans.

NUPRC’s 2025 Plan

In July 2025, NUPRC released a development plan for frontier basins, outlining seismic surveys, data analysis, and drilling in Dahomey, Anambra, Bida, Sokoto, Chad, and Benue.

Key activities include testing the Eba-1 well in Dahomey, new drilling in Bida, re-evaluating Wadi wells in Chad, and reassigning Ebeni-1 in Benue.

NUPRC Chief Executive Gbenga Komolafe signed the plan, noting it will de-risk assets for future drilling.

PSC Profit Trends

PSC profits totaled N1.06 trillion year-to-date, short of the N1.58 trillion budget by N518.76 billion. Despite fluctuations, the 30% deduction for frontier exploration was applied monthly, accumulating N318.05 billion by August.

NNPCL’s management fees matched this amount, totaling N636.1 billion combined.

Monthly Breakdown

Deductions varied: N31.77 billion in January, N38.30 billion in February, N61.49 billion in March, N36.58 billion in April, N38.8 billion in May, N6.83 billion in June, N25.34 billion in July, and N78.94 billion in August.

The Federation Account, getting 40% of PSC profits, received N424.071 billion, below the N631.573 billion target by N207.502 billion.

Dividend Shortfall

NNPCL’s interim dividends, budgeted at N2.169 trillion year-to-date, remain unpaid, widening revenue gaps.

A FAAC subcommittee reviewed the frontier deductions with NNPCL, NUPRC, and the Central Bank of Nigeria. NNPCL detailed 1999-2025 exploration and 2025 plans, ensuring compliance.

Economic Outlook

The fund supports Nigeria’s goal to expand oil production in frontier areas, reducing import dependence and fostering growth.

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