Tinubu Orders NNPC to Remit Oil and Gas Revenues Directly to Federation Account

President Bola Tinubu has signed an Executive Order to tighten control over Nigeria’s oil and gas earnings, reduce revenue leakages, eliminate overlapping structures, and ensure more funds reach the Federation Account for federal, state, and local governments.

The order was issued under Section 5 of the Constitution and anchored on Section 44(3), which vests ownership and control of minerals, mineral oils and natural gas in the Government of the Federation, including resources in Nigeria’s territorial waters and Exclusive Economic Zone.

The directive focuses on provisions introduced under the Petroleum Industry Act framework, which the presidency describes as creating legal and structural channels for deductions, charges, and fees that significantly reduce the amount ultimately remitted to the Federation Account.

Under the existing structure, NNPC Limited retains 30 per cent of Federation oil revenues as a management fee on Profit Oil and Profit Gas from production sharing, profit sharing and risk service contracts. NNPC also retains 20 per cent of its profits for working capital and future investments. With that 20 per cent already in place, the additional 30 per cent management fee was presented as unjustified.

Beyond that, NNPC retains another 30 per cent of profit oil and profit gas under those same contract arrangements through the Frontier Exploration Fund. The Federal Government’s position is that dedicating such a large amount to speculative exploration could build up idle balances and encourage inefficient spending at a time when resources are needed for urgent priorities like security, education, healthcare and energy transition investments.

Duplications flagged in gas flare funding

The order also addresses the Midstream and Downstream Gas Infrastructure Fund, financed through gas flaring penalties. The presidency notes an overlap with the Environmental Remediation Fund already established under the PIA and administered by the upstream regulator, arguing that multiple funds and fees for similar purposes deepen fragmentation and reduce net revenue inflows.

What changes immediately

From the date of the Executive Order, listed as February 13, 2026, NNPC Limited will no longer collect or manage the 30 per cent Frontier Exploration Fund component. Instead, the 30 per cent profit oil and profit gas previously earmarked for that fund is to be transferred to the Federation Account.

NNPC Limited is also stripped of entitlement to the 30 per cent management fee on profit oil and profit gas that should accrue to the Federation Account.

In addition, operators and contractors under production sharing contracts are directed to pay Royalty Oil, Tax Oil, Profit Oil, Profit Gas, and any other government interests directly into the Federation Account, rather than through intermediary retention structures.

Gas flare penalties redirected

The order suspends payments of gas flare penalties into the Midstream and Downstream Gas Infrastructure Fund. Going forward, proceeds from penalties imposed for gas flaring are to be paid into the Federation Account. The order further states that any spending from the MDGIF must follow existing public procurement laws, policies and regulations.

Tinubu approved the formation of a joint project team to drive integrated petroleum operations, with the commission positioned as the interface with licensees and lessees where upstream and midstream operations are fully combined.

Implementation committee

An Implementation Committee has been created to drive coordinated execution of the order. Membership includes 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 (Oil).

Other members listed include the Chairman of the Nigeria Revenue Service, a representative of the Ministry of Justice, the President’s Special Adviser on Energy, and the Director-General of the Budget Office of the Federation, which will serve as the committee’s secretariat.