A lot is set to change in the way and manner Nigeria’s oil and gas revenues are remitted and accounted for – and about time, too.
Under the current framework, the country’s main energy parastatal, the Nigerian National Petroleum Corporation Limited (NNPCL) retains 30% of the Federation’s oil revenues as a management fee on a variety of fees and contracts – as well as 20% of its profits to cover working capital and future investments – including so-called ‘frontier explorations’. Experts in the energy sector have long argued that the 30% NNPCL management fee devoted to exploration (some of it quite speculative, at best) runs the risk of encouraging inefficient exploration-related spending – at a time when resources are urgently needed for core national priorities such as security, education, healthcare, and investments in energy transition, as well as other implications for national budgeting, debt sustainability and economic stability.
Not any more, says the administration of President Bola Ahmed Tinubu – especially in respect of the said 20% retention, in the face of which, the Presidency says, the 30% management fee is ‘unjustified’ – as the retained earnings are already sufficient to support the functions NNPCL performs under its wide range of existing contracts.
To this end, he has signed an Executive Order (effective from February 13, 2026) directing the remittance of oil and gas revenues directly to the Federation Account. The Order, the federal government says, is aimed at realigning oil and gas revenue flows with constitutional requirements, strengthening fiscal transparency and clarifying regulatory mandates. It seeks to restore the constitutional revenue entitlements of federal, state, and local governments. Recall that these entitlements were removed in 2021 by the Petroleum Industry Act (PIA 2022) – a move which, according to the Presidency, has now created structural and legal channels through which substantial Federation revenues are being lost through deductions, sundry charges, and fees; in fact, the Presidency attributes the continuing decline in Nigeria’s net oil revenue inflows (in spite of improvements in production levels and in the price of crude oil in the international market) to these deductions, as well as to the fragmented oversight under the PIA’s framework.
In line with the Order, all operators/contractors of oil and gas assets held under any production sharing contract shall henceforth pay royalty oil, tax oil, profit oil, profit gas, and any other interest directly to the Federation Account. This effectively blocks deductions at source.
The legal basis for President Tinubu’s action, says the Presidency, is Section 5 of the aforementioned Constitution, whose aim is to curb wasteful spending, eliminate duplicative structures in this critical sector of the national economy, and redirect resources for the benefit of the Nigerian people. It also aligns with Section 44(3) of the Constitution, which vests 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 federal government.
According to a statement issued by the President’s media aide, Bayo Onanuga, the Order will introduce measures to curb leakages, enhance transparency, eliminate duplicative structures, and reposition the NNPCL strictly as a commercial enterprise – as originally envisioned under the PIA. Apart from clarifying the proper role of the PIA and other regulatory bodies such as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) – to enable investors and operators better understand which agency is responsible for which specific regulatory duties – the Order also suspends payments of gas flare penalties into the Midstream Gas Infrastructure Fund (MDGIF).
To ensure the effective implementation of the Order, Tinubu has approved the establishment of an implementation committee comprising the Minister of Finance and Coordinating Minister of the Economy; the Attorney-General of the Federation and Minister of Justice; the Minister of Budget and National Planning; and the Minister of State for Petroleum Resources (in charge of Oil), among others.
The President’s Executive Order – though still an interim corrective measure, pending legislative action and amendments where necessary – comes at a time of rising domestic fiscal pressures and heightened global competition for energy capital. In such an environment, the last thing Nigeria needs are further inefficiencies in the management of its most strategic economic asset.
Stakeholders already envisage it going a long way to reshape cash flow structures within the sector. Calling it ‘bold and historic’, ‘a seismic shift’, and ‘a landmark step towards fiscal discipline and transparency in the management of Nigeria’s oil wealth,’ experts in the sector say it corrects a long-standing fiscal imbalance created by the PIA, whose provisions vest only 40% of oil revenues in the federal, state and local governments, as against about 60% in the NNPCL and affiliated bodies.
Having said that these experts also emphasise the need for institutional safeguards to ensure that the new policy achieves its intended goals. For years – if not decades – Nigerians have demanded greater clarity and transparency in the management of petroleum revenues. By this Order – which essentially ensures that NNPCL’s earnings first go into the Federation Account before any further disbursements – President Tinubu has now created a framework that makes proper scrutiny and institutional oversight in respect of that notoriously opaque oil parastatal that much easier. If effectively implemented, the President’s decision will, in the view of relevant stakeholders, not only enable Nigerians to know exactly how much the country is earning from its oil resources, but will also reinforce public trust and meet global best practices in public financial management.
Above all, it will send one more signal that this President’s avowed commitment to fundamental reforms – especially when it comes to strengthening public institutions and promoting fiscal discipline – is more than just a catchphrase.
Clearly, this is a President that is committed to doing things differently – in a country where fundamental change in the way things are done is not just an urgent imperative, but long overdue.
Nigeria to Launch Exports of New Crude Grade as It Boosts Output
Nigeria will launch exports of a new crude grade in March as OPEC’s biggest African oil producer looks to boost output and exports and seek a higher baseline in the OPEC+ agreements.
The national oil company of Nigeria will start shipping the Cawthorne grade, a type of sweet crude similar to the country’s flagship Bonny Light crude, a spokesperson for NNPC said on Tuesday.
The first loading of the new crude variety is set to take place in the third week of March, a source with knowledge of the plans told the publication.
Cawthorne will be exported from the floating production storage and offloading (FPSO) of the same name and could raise Nigerian crude and condensate supply to 1.7 million barrels per day (bpd) for the remainder of 2026, up from about 1.65 million bpd now, according to a Kpler note cited by Reuters.
In each of the past two years, Nigeria launched a new crude grade on the global market—Obodo in 2025 and Utapate in 2024.
Nigeria has failed to pump to its OPEC+ quota in recent years and missed its own oil production targets last year, but it plans an output boost through 2030.
The African country booked average daily crude oil production of around 1.5 million barrels for 2025, which was 500,000 bpd lower than the government’s target for the sector.
Going forward, Nigeria’s NNPC plans to “Intensify collaboration with our partners through year-end and into 2026 to ensure improved production performance, maximise infrastructure uptime, and maintain high facility maintenance standards across all our assets.”
NNPC is set to increase oil production to 2 million bpd over the next two years, its executive vice president for upstream, Udy Ntia, said in November 2025.
By 2030, NNPC will be pumping 3 million barrels daily, according to the official correspondence.
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