NNPCL Deductions for Frontier Exploration Hit N235.6 Billion in Seven Months
By Joseph Iyaji | Akahi News
The Nigerian National Petroleum Company Limited (NNPCL) has deducted a total of N235.6 billion between January and July 2025 from the Frontier Exploration Fund (FEF), in line with the Petroleum Industry Act (PIA).
According to the company’s financial documents, the deductions represent 30 per cent of Profit Sharing Contract (PSC) proceeds earmarked for oil exploration in frontier basins across the country, particularly in the North, including the Chad Basin, Benue Trough, and Anambra Basin.
Push for Northern Oil Exploration
The FEF, designed to diversify Nigeria’s oil production away from the Niger Delta, remains one of the most contentious provisions of the PIA. While civil society groups argue it undermines climate commitments and diverts resources from urgent development needs, successive governments have pursued frontier drilling as a strategic priority.
In May, NNPCL confirmed plans to resume oil drilling in the North by June, with operations scheduled to restart at the Kolmani field spanning Bauchi and Gombe states. Group Chief Executive Officer, Bayo Ojulari, who was appointed in April, had assured that exploration in frontier basins remained on track under the PIA framework.
“The government is on track with prospects for oil in the North,” Ojulari told the BBC Hausa Service, reaffirming that frontier exploration is a top priority despite decades of elusive results.
Over the past 20 years, more than $3 billion has reportedly been spent on oil search efforts in the North, including claims of one billion barrels in discovered reserves.
Breakdown of Deductions
Figures from NNPCL’s reports show varying monthly deductions within the period:
- January: $8.16m + N9.73bn = N22.2bn
- February: $17.59m + N5.8bn = N31.7bn
- March: $18.66m + N10.47bn = N38.3bn
- April: $28.51m + N17.71bn = N61.4bn (highest single-month deduction)
- May: $1.88m + N33.58bn = N36.5bn
- June: $24.17m + N499.1m = N38.7bn
- July: $3.99m + N732.9m = N6.8bn
The total N235.6bn deducted in just seven months underscores the aggressive pace of frontier allocations compared to other statutory funds created by the PIA.
Imbalance With Host Communities
By comparison, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) revealed in June that oil-producing host communities in the Niger Delta received N98 billion and $150 million (N328.2bn equivalent) under the Host Communities Development Fund (HCDF) over four years.
This means that while host communities got N328.2 billion in four years, frontier exploration alone has consumed N235.6 billion in only seven months—nearly five times more on a monthly average.
Analysts, especially from the Niger Delta, have long criticised the funding disparity, warning that it reflects a strong policy bias towards opening new oil frontiers rather than addressing the environmental and social costs of decades of oil extraction in existing producing regions.
As NNPCL continues to push frontier exploration under the PIA framework, questions over transparency, sustainability, and equity in resource allocation remain at the heart of Nigeria’s oil governance debate.
🎓 Attend 2027/2028 JAMB, Post-UTME, WAEC, and NECO GCE Tutorials
Get fully prepared with expert tutors, comprehensive study materials, and personalised academic guidance at Akahi Tutors.
📍 Located at 67, Oduduwa College Road, Off Sabo Junction, Ile-Ife.
📞 Call: 08038644328
for enrollment and accommodation reservation.