The Nigerian National Petroleum Company Limited (NNPCL) has received N318 billion between January and August this year to fund new oil exploration projects across the country.

The money comes from the Frontier Exploration Fund, created under the Petroleum Industry Act (PIA) 2021. The law sets aside 30 percent of profits from Production Sharing Contracts (PSCs) every month for oil exploration in untapped basins such as Anambra, Bida, Sokoto, Chad, Dahomey and Benue.

Figures from the Federation Account Allocation Committee (FAAC) show that while PSC profits fell short of targets this year, NNPCL still got its share each month. Contributions ranged from as little as N6.8 billion in June to as high as almost N79 billion in August.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has already drawn up plans for the fund, including seismic surveys, well drilling and reappraisals across several inland basins. Officials say the outcome of these projects will determine how much new oil Nigeria can add to its reserves.

However, the deductions have stirred debate. Experts warn that the 30 percent allocation is too high and is depriving the Federation Account of much-needed revenue at a time when government finances are tight. Between January and August, the account received N424 billion from PSC profits — far below the N631 billion target.

Budget officials and industry experts are now pushing for a review. Some recommend cutting the allocation to 10 percent, while others urge caution, stressing that the PIA took nearly two decades to negotiate.

President Bola Tinubu has ordered a review of all major deductions by revenue agencies, including NNPCL, to ensure more money flows into government coffers.

For now, NNPCL has secured N318 billion to push ahead with oil exploration in Nigeria’s frontier basins, but questions remain over whether the country can afford to keep diverting such large sums away from the Federation Account.