Tinubu’s oil revenue executive order: PENGASSAN meets presidential committee Wednesday
The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) is set to meet with the Presidential Implementation Committee on Wednesday as tensions persist over President Bola Tinubu’s recent directive on oil and gas revenue remittance.
The meeting comes amid growing industry concern about the implications of the policy shift, particularly its potential impact on workers attached to production sharing contracts and revenue administration structures within the Nigerian energy sector.
PENGASSAN President Festus Osifo confirmed the planned engagement during the union’s National Executive Council meeting in Abuja.
According to him, dialogue with government representatives has been ongoing, and the forthcoming session with the committee represents a continuation of efforts to reconcile differing interpretations of the directive.
Divergent legal interpretations
At the heart of the disagreement is President Tinubu’s executive order mandating that royalty oil, tax oil, profit oil, profit gas, and related revenues under production sharing and risk service contracts be remitted directly to the Federation Account.
The Tinubu executive order also discontinued the 30 percent Frontier Exploration Fund established under the Petroleum Industry Act and halted the 30 percent management fee previously retained by the Nigerian National Petroleum Company Limited on profit oil and profit gas.
While the presidency maintains that the directive is grounded in constitutional authority—specifically Section 5 and Section 44(3) of the 1999 Constitution (as amended)—PENGASSAN argues that aspects of the order may conflict with the operational and financial framework laid out in the PIA.
Osifo noted that discussions have moved beyond procedural arguments to focus on practical consequences. “We are now looking at the substance—how this affects our members, the industry, and the nation,” he said.
Impact on workers and contract oversight
One of the union’s primary concerns is the fate of personnel responsible for supervising production sharing contracts (PSCs). These professionals interface with multinational operators such as Shell, TotalEnergies, and ExxonMobil to reconcile accounts and ensure accurate revenue declarations.
According to PENGASSAN, the management fee component historically funded salaries and allowances for staff overseeing these contracts. With the Tinubu executive order scrapping that arrangement, questions have arisen about alternative funding mechanisms for these critical roles.
Union leaders warn that abrupt changes without transitional safeguards could disrupt operational stability in a sector that contributes the bulk of Nigeria’s foreign exchange earnings
“We support transparency and accountability,” Osifo stated. “But any reform must consider the human and institutional structures that sustain the industry.”
Revenue implications and fiscal recalibration
Government estimates indicate that the changes could significantly alter revenue flows. Based on 2025 remittance projections, management fees and frontier exploration allocations previously retained by NNPC Limited were valued at over N900bn, while royalties and gas-related revenues amounting to trillions of naira would now be channelled directly into the Federation Account.
The Nigeria Revenue Service and other regulatory bodies could also see adjustments in their revenue collection mandates, as petroleum profits tax and hydrocarbon tax administration undergo restructuring.
Supporters of the Tinubu executive order argue that consolidating revenue streams enhances fiscal transparency and strengthens oversight by ensuring direct remittance into the Federation Account Allocation Committee framework.
They contend that the measure reduces discretionary retention of funds and aligns with broader public finance reforms.
However, critics caution that legal and operational ambiguities must be resolved to avoid litigation or industrial unrest.
Political and industry balancing act
The Presidential Implementation Committee includes the Minister of Finance and Coordinating Minister of the Economy, the Attorney-General of the Federation, the Minister of Budget and National Planning, and the Minister of State for Petroleum Resources, among others. The committee is tasked with ensuring smooth execution of the directive.
For PENGASSAN, the upcoming meeting represents an opportunity to negotiate safeguards that protect workers while accommodating the government’s reform objectives.
Energy analysts describe the situation as a delicate balancing act. On one hand, Nigeria faces mounting fiscal pressures that demand improved revenue accountability. On the other, abrupt structural shifts in the oil and gas value chain could unsettle a sector already navigating global energy transition dynamics.
Industry observers note that stability in Nigeria’s upstream petroleum operations remains crucial to sustaining investor confidence, particularly as international oil companies reassess capital allocation strategies across emerging markets.
Osifo expressed cautious optimism that dialogue could yield constructive outcomes. He reiterated that the union’s approach has been measured—beginning with public advocacy and progressing to structured engagement with policymakers.
“We are not politicising the issue,” he said. “Our interest is the welfare of our members and the long-term health of the industry.”
As the Tinubu executive order continues to generate debate, Wednesday’s meeting may prove pivotal in shaping the implementation pathway.
Whether through legislative clarification, administrative adjustments, or negotiated safeguards, stakeholders across the oil and gas ecosystem are watching closely.
For now, the focus remains on engagement rather than confrontation—an indication that both labour and government recognise the strategic importance of preserving stability in Nigeria’s most critical revenue-generating sector.
