PENGASSAN President Festus Osifo criticises federal executive order on oil revenue, highlighting deduction structure, operational impact, and need for National Assembly review

Festus Osifo, President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), has raised concerns over the Federal Government’s recently signed Presidential Executive Order on oil revenue, arguing that public explanations about a 30 per cent deduction are misleading.

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Speaking in an interview on Arise TV on Friday, Osifo explained that revenues from petroleum sharing contracts undergo several deductions—royalties, taxes, and cost recovery—before arriving at profit oil or profit gas, which is the basis for the 30 per cent allocation.

“When you get revenue from PSC, you have to make some deductibles… Once you have done that, you will now have what we call profit oil or profit gas.

Then that is where you now deduct the 30 per cent,” he said, noting that the deduction effectively represents only about two per cent of total PSC revenue.

Osifo warned that removing the retained portion could affect NNPC Ltd’s operational capacity, including payment of salaries and other internal obligations.

He further cautioned that such regulatory uncertainty could undermine investor confidence in Nigeria’s oil and gas sector.

He urged President Bola Tinubu to withdraw the executive order and to engage a legislative review of the Petroleum Industry Act (PIA) through the National Assembly, emphasising that amendments should involve stakeholders, including labour unions and industry operators.

The executive order, signed on February 18, 2026, mandates that royalty oil, tax oil, profit oil, profit gas, and other upstream revenues be paid directly into the Federation Account Allocation Committee.

The directive removes NNPC Ltd’s authority to retain the 30 per cent management fee and frontier exploration fund previously allowed under the PIA, a move Osifo described as setting a troubling legal precedent.

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Osifo concluded that proper legislative review, rather than executive fiat, is essential for refining laws and maintaining clarity in Nigeria’s oil and gas regulatory framework.