Fresh uncertainty has gripped key players in Nigeria’s oil and gas sector following a new executive order by President Bola Ahmed Tinubu directing that oil and gas revenues be paid directly into the Federation Account for distribution among the three tiers of government.
The directive, which reportedly stops certain agencies from retaining portions of internally generated revenue, has raised concerns within the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Nigerian National Petroleum Company Limited (NNPCL), and the Midstream and Downstream Gas Infrastructure Fund.
Industry stakeholders say the major source of anxiety is the absence of a clearly defined alternative funding framework for the NUPRC, particularly as oil and gas royalties are now to be channelled fully into the Federation Account. According to insiders, the commission’s statutory responsibilities — including oversight, monitoring and enforcement in the upstream sector — require predictable and timely funding.
Experts have pushed back against suggestions that the regulator could rely solely on traditional budgetary allocations approved by the National Assembly. They argue that such a system may introduce bureaucratic bottlenecks, funding delays and political pressures that could undermine the commission’s operational independence and efficiency.
Senior officials within the NUPRC, who spoke anonymously, maintained that the funding model established under the Petroleum Industry Act (PIA) 2021 was designed to insulate the regulator from such constraints. They noted that the Act empowers the commission to recruit and retain highly skilled professionals with remuneration competitive with private sector and international oil company standards.
There are also wider concerns about how the new revenue structure could affect Nigeria’s Reserve Replacement Ratio and the financing of frontier exploration activities. Questions remain over the future operational scope of Frontier Exploration Services and the Midstream and Downstream Gas Infrastructure Fund, especially as the country targets crude oil production of about three million barrels per day by 2030 and seeks to attract more than $12 billion in annual investments.
Stakeholders warn that without a clear and sustainable funding strategy, the reforms could unintentionally weaken regulatory capacity at a time when Nigeria is seeking to strengthen investor confidence and expand upstream output.
