Executive Order No. 9 of 2026, which redirects investment funds from the Nigerian National Petroleum Company (NNPC) Limited’s strategic growth programs, prioritizes urgent cash inflows over the oil industry’s long-term sustainability, Professor Emeritus Wunmi Iledare, has said.
In a position paper on the order, the renowned energy analyst argued that the order not only suspends key provisions of the Petroleum Industry Act (PIA) but effectively pulls operating capital away from essential reserves-building efforts.
At the heart of the order is the dismantling of the Frontier Exploration Fund (FEF), established under the PIA and funded by 30 per cent of NNPC’s profit oil and gas from production sharing contracts (PSCs).
This fund was meant to drive long-term petroleum reserves growth via frontier basin exploration. Executive Order 9 now suspends that allocation, rerouting the funds straight to the Federation Account.
“While this may enhance short-term FAAC inflows,” Prof. Iledare warned, it signals a government preference for “immediate distributable revenue over long-term reserves sustainability.”
The order also halts NNPC’s 30 per cent management fee, a move the don views as disruptive to the company’s commercial autonomy.
Enacted under the PIA to operate as a limited liability entity, NNPC relies on predictable compensation, Prof. Iledare stresses.
Altering this requires “structured legislative or policy review,” not unilateral suspension, to maintain institutional credibility.
He dismisses claims of revenue gains, noting that “redirecting existing fiscal streams does not automatically increase production, reduce operating costs, improve security, or attract new investment.” True sustainable revenue, he insists, hinges on “production growth and regulatory stability”—not mere re-routing.
Prof. Iledare further noted the order’s governance implications. The PIA clearly delineates roles: policy for the ministry, regulation for NUPRC and NMDPRA, and operations for NNPC. Executive coordination, including via the special adviser on Energy, risks “over-centralisation” and blurring these boundaries if it encroaches on statutory domains.
“Coordination strengthens reform; over-centralisation risks blurring statutory boundaries,” he observed. “The strength of the PIA lies in clarity of roles and legal hierarchy. Any reform initiative should reinforce that architecture. In petroleum fiscal governance, durability, coherence, and production optimisation matter more than speed,” the don stated.
SOURCE: LEADERSHIP NEWS PAPER
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