The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has challenged claims that the Federal Government’s recent executive order removes 30 per cent of oil revenue from production sharing contracts (PSCs).
Speaking during an interview on Arise TV, PENGASSAN President Festus Osifo said the figure being circulated in public discussions does not reflect the true structure of how PSC revenues are calculated.
According to him, revenue generated under PSC arrangements is not treated as gross income for the Nigerian National Petroleum Company Limited (NNPC Ltd).
He explained that before any profit is determined, several statutory deductions are made — including royalties, taxes and cost recovery for operators. Only after these deductions is what remains classified as “profit oil” or “profit gas.”
Osifo clarified that the 30 per cent referenced in public debates is applied only to that profit portion — not the total revenue. When broken down against the overall PSC earnings, he argued, the deduction amounts to roughly two per cent of total revenue, not 30 per cent as widely perceived.
He warned that removing that portion of funds could affect NNPC Ltd’s operational capacity, noting that part of the revenue supports salaries and internal obligations across the upstream, midstream and downstream segments.
Osifo also raised concerns about potential investor uncertainty, stating that sudden policy shifts could weaken international confidence in Nigeria’s oil and gas sector.
In addition, he called on President Bola Tinubu to reconsider and withdraw the newly signed Presidential Executive Order to Safeguard Federation Oil and Gas Revenues and Provide Regulatory Clarity, 2026.
He maintained that any adjustment to the framework established under the Petroleum Industry Act (PIA) should go through the National Assembly rather than being introduced through executive directives.