The Nigerian National Petroleum Company Limited (NNPC) has earned a total of N890.8 billion from management fees and the Frontier Exploration Fund (FEF) in the first 11 months of 2025, official figures submitted to the Federation Accounts Allocation Committee (FAAC) reveal. This revenue comes from Production Sharing Contract (PSC) operations, reinforcing the continued importance of Nigeria’s upstream oil and gas sector to public finances, even amid volatile crude prices and fiscal constraints.
Under the Petroleum Industry Act (PIA), NNPC is entitled to deductions from PSC profits, including management fees that cover the company’s costs as concessionaire and manager of PSC operations. These fees compensate the company for technical, commercial, and administrative oversight, including contract management and coordination of upstream activities on behalf of the federation.
The Frontier Exploration Fund, on the other hand, is specifically earmarked for exploration in Nigeria’s underexplored and higher-risk basins, such as Chad, Sokoto, Bida, Anambra, and Benue troughs. Like management fees, the FEF is funded with 30 percent of PSC profits, reflecting a shared commitment to sustaining upstream exploration while supporting long-term revenue growth.
FAAC documents show that between January and November, each revenue line accounted for N445.4 billion, together forming 60 percent of total PSC profit distribution. However, the overall distribution of PSC profits for the 11 months, totaling about N1.48 trillion, fell short of the year-to-date budget, with a negative variance of roughly N686.3 billion. Monthly inflows fluctuated, with strong months like August and September offset by weaker months, notably June and October.
While NNPC’s internal accounts saw these substantial inflows, the federation’s share—40 percent of PSC profit—totaled N593.9 billion in the same period, also underperforming against the budget. FAAC reports highlighted that no interim dividend was remitted to the Federation Account during the period, pointing to persistent challenges in oil revenue predictability and raising concerns about the adequacy of federal income from petroleum operations.
source: This day