REGULATORY · MARKET STRUCTURE · COMPETITIVE · NIGERIA
Nigeria blocks NNPC 30% oil revenue management fee
Yahoo
21 Feb · 11:27 AM
Change
President Bola Tinubu issued an executive order preventing NNPC from collecting a 30% management fee on oil and gas revenues.
Why it matters
Removing NNPC’s 30% management fee alters the net revenue split between the national oil company and public-sector recipients, affecting how much funding reaches federal and state-level fiscal programs. The executive-order route changes the perceived stability of the Petroleum Industry Act framework for counterparties relying on statutory fee and deduction structures. This can affect investment underwriting assumptions tied to government take, deductions, and payment mechanics in Nigeria’s upstream and gas projects. The move also shifts internal incentives and bargaining power among agencies and funds previously supported by overlapping deductions.
Implications
- • Higher net oil/gas revenue flows to federal and state budgets
- • NNPC operating funding model faces a near-term gap vs prior fee stream
- • Investor underwriting assumptions on deductions/government take may need revision
- • Regulatory certainty risk increases due to executive-order bypass of parliament
Who is affected
- • NNPC and its operating subsidiaries
- • International oil companies and upstream JV partners in Nigeria
- • Oilfield service contractors paid from NNPC-managed cashflows
- • Nigeria state governments reliant on statutory revenue allocations
Source
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Topics
World & Politics Policy & Regulation Energy & Power Oil & Gas Finance & Banking Financial Services