NNPCL Secures ₦318bn for Frontier Oil Exploration in Eight Months, FAAC Records Show
Story: written by Uzuh Rita September 25,2025
The Nigerian National Petroleum Company Limited (NNPCL) has received ₦318.05 billion between January and August 2025 to finance oil exploration in frontier basins, according to documents from the September Federation Account Allocation Committee (FAAC) meeting.
The deductions represent 30% of Production Sharing Contract (PSC) profits, automatically set aside under the Petroleum Industry Act (PIA) 2021 for frontier basin exploration. The law established the Frontier Exploration Fund, overseen by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), to drive oil search in under-explored regions such as the Anambra, Bida, Dahomey, Sokoto, Chad, and Benue basins.
Frontier Exploration Plans
In July, the NUPRC launched its 2025 Frontier Basin Exploration and Development Plan, outlining a series of activities including seismic surveys, stress-field detection, and new drilling programmes. Key projects include the logging of the Eba-1 well in the Dahomey Basin, drilling of a new wildcat well in Bida, and reassessment of earlier wells in Chad.
FAAC Data Breakdown
FAAC records reveal that PSC profits for the period stood at ₦1.06 trillion, below the ₦1.58 trillion budgeted, yet the statutory 30% deduction was applied consistently. Monthly allocations to frontier exploration were as follows:
- January: ₦31.77bn
- February: ₦38.30bn
- March: ₦61.49bn (sharpest monthly rise)
- May: ₦38.80bn
- June: ₦6.83bn (lowest level)
- July: ₦25.34bn
- August: ₦78.94bn (highest so far)
By August, the cumulative allocation reached ₦318.05bn. A parallel 30% deduction was also paid to NNPCL as management fees, bringing its total take to ₦636.1bn in eight months.
Pressure on Federation Account
The 40% share of PSC profits that flows into the Federation Account has been reduced by these deductions, with year-to-date inflows at ₦424.07bn—₦207.5bn short of the target.
Compounding fiscal pressure, NNPCL has yet to remit any of its ₦2.17 trillion interim dividends projected for 2025. FAAC’s subcommittee has directed the oil company to provide full financial disclosures on all frontier exploration activities by September 19. However, documents indicate that the audit remains a “work in progress.”
Outlook
Energy analysts warn that while frontier exploration could unlock new reserves and diversify Nigeria’s oil map, the funding structure continues to strain federal revenues. Transparency in fund utilization and progress reporting will be critical to sustaining confidence in the scheme.
