Between January and August 2025, the Nigerian National Petroleum Company Limited (NNPC Ltd) received N318.05 billion for frontier oil exploration, according to documents from the September 2025 Federation Account Allocation Committee (FAAC) meeting, reviewed by The PUNCH.
This amount represents 30 per cent of the profits from Production Sharing Contracts (PSCs), which are automatically allocated each month to fund exploration in Nigeria’s inland basins. The Petroleum Industry Act (PIA) 2021 established the Frontier Exploration Fund, mandating that this portion of PSC profits be directed toward exploration in under-explored regions such as Anambra, Bida, Dahomey, Sokoto, Chad, and Benue.
The fund is managed by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) through an escrow account, with a statutory requirement to produce an annual Frontier Basin Exploration and Development Plan. In July 2025, the NUPRC unveiled its latest plan, outlining seismic surveys, stress-field detection, data integration, and exploratory drilling across several basins.
It also included specific activities like well logging, reappraisals, and reassignment of drilling operations, all aimed at assessing exploration potential and guiding future investment decisions. The plan was signed by NUPRC Chief Executive Gbenga Komolafe, who emphasized that the results would shape further de-risking and drilling strategies in line with regulatory requirements.
Despite PSC profits falling short of the projected N1.58 trillion—with actual earnings at N1.06 trillion, creating a N518.76 billion shortfall—the 30 per cent frontier fund allocation was applied consistently every month.
The data shows significant monthly fluctuations, with deductions rising and falling in line with volatile PSC profits. For example, allocations ranged from a low in June to a peak in August, reflecting shifts in earnings and production performance.
Nevertheless, by the end of August, the total deductions had steadily built up to N318.05 billion under NNPC’s control for ongoing exploration efforts.
A parallel 30 per cent deduction was also made from NNPC’s management fees, matching the frontier exploration contributions throughout the period.
