The Nigerian National Petroleum Company Limited (NNPCL) has received N318.05 billion between January and August 2025 to fund oil exploration in frontier basins, documents from the September Federation Account Allocation Committee (FAAC) meeting have revealed.
The allocation represents 30 per cent of profits from Production Sharing Contracts (PSCs), which are automatically deducted monthly under the provisions of the Petroleum Industry Act (PIA) 2021. The Act established the Frontier Exploration Fund, mandating that part of NNPCL’s PSC earnings be invested in exploration of underdeveloped basins such as Anambra, Bida, Dahomey, Sokoto, Chad, and Benue.
According to the documents, total PSC profits for the eight-month period stood at N1.06 trillion—well below the budgeted N1.58 trillion, creating a shortfall of N518.76 billion. Despite the gap, the statutory deductions were consistently applied, resulting in an accumulated N318.05 billion for exploration activities.
Also Read: DAPPMAN Seeks Affordable Fuel from Dangote
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which manages the fund, unveiled a Frontier Basin Exploration and Development Plan in July. Signed by its Chief Executive, Gbenga Komolafe, the plan outlined seismic surveys, stress-field detection, data integration, and drilling programmes across the designated basins. Key projects include logging and testing of the Eba-1 well in the Dahomey Basin, fresh drilling in Bida, reappraisal of Wadi wells in Chad, and the reassignment of Ebeni-1 in Benue.
Monthly breakdowns highlighted fluctuations in deductions. In January, N31.77 billion was transferred from PSC profits of N105.91 billion. February’s deduction rose to N38.30 billion as profits hit N127.67 billion. March recorded the sharpest increase, with N61.49 billion channelled from profits of N204.96 billion—a 60.5 per cent jump from the previous month. April, however, saw deductions decline to N36.58 billion, reflecting reduced profits of N121.93 billion.
Industry analysts say the success of these frontier exploration efforts will be critical in de-risking Nigeria’s inland basins, boosting reserves, and diversifying oil output away from the Niger Delta, which has long dominated production.
