The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has called on President Bola Tinubu to withdraw a recent Executive Order mandating the direct remittance of oil and gas revenues into the Federation Account, warning that the directive could destabilise the sector and threaten about 4,000 jobs.
Addressing journalists in Lagos, PENGASSAN President Festus Osifo said the order undermines key provisions of the Petroleum Industry Act (PIA), enacted in 2021 to reform and stabilise Nigeria’s oil and gas industry after years of regulatory uncertainty.
Osifo questioned the implications of altering an existing legal framework through executive action, arguing that it could send negative signals to investors.
“What are we telling the investors? What are we telling the international community? That just with an executive order, you can set aside the law of the land? This is an aberration. This should never have happened,” he said.
He added that certain provisions in the Executive Order did not present the full picture regarding revenue allocation, clarifying that statutory royalties are paid into government coffers and not to regulators personally.
According to him, the portion eventually transferred is “somewhere below two percent,” while the 30 percent Frontier Exploration Fund is channelled into a designated Frontier Exploration Account rather than directly to the NNPC Limited.
Osifo warned that if the directive remains in force, the financial strain on industry operators could lead to layoffs.
“If this is allowed to sit through the way it is today, in the next few months, our members are in danger of being declared redundant because the company may not be able to meet their obligations,” he said.
He stressed that the union represents thousands of senior staff across the sector whose livelihoods depend on a stable regulatory and financial framework.
Recalling the prolonged legislative efforts that culminated in the passage of the PIA, Osifo said the law was designed to restore investor confidence and establish clear rules of engagement in a sector long plagued by policy uncertainty.
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“We had to believe that with that piece of legislation, there would be some level of certainty in the industry. The people who are coming to invest will know what the rules of engagement are. If you don’t stabilise your own environment, the investors will take their money elsewhere,” he said.
He emphasised the strategic importance of oil and gas to Nigeria’s economy, noting that the sector remains the country’s primary source of revenue and foreign exchange earnings.
“Our major revenue earner as a country is oil and gas. The more money we earn from the industry, the more we can defend our naira. If production is impacted and foreign exchange earnings reduce, it will affect our exchange rate, and once the exchange rate is impacted, it will affect our pockets,” he warned.
Describing the industry as highly capital-intensive, Osifo noted that some drilling rigs cost as much as $1.5 million per day to operate.
“It is not a one-dollar business. It is a multi-billion-dollar industry. That is why we must not allow investors to flee,” he said.
He further revealed that the union had anticipated a formal amendment bill to address any concerns with the PIA, rather than an Executive Order.
“The information at our disposal was that there was going to be a bill. But instead of a bill, it came as an executive order. We were not carried along in any way,” he stated.
As debate continues over the Executive Order’s implications, industry stakeholders are closely watching for potential dialogue between the government, labour unions and operators to prevent disruptions in a sector critical to Nigeria’s economic stability.