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Nearly 4,000 jobs in Nigeria’s oil and gas sector are at risk if President Bola Tinubu does not rescind an executive order directing petroleum revenues straight into the federation account, according to the country’s main union representing senior staff in the industry.
Festus Osifo, president of the Petroleum and Natural Gas Senior Staff Association of Nigeria, told reporters in Lagos that the directive threatens to destabilize an industry already struggling to attract foreign capital and warned that companies may soon be unable to meet payroll obligations if the order stands.
“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,” Osifo said.
The executive order bypasses provisions in the Petroleum Industry Act, a 2021 reform law crafted after years of consultation to restore investor confidence following a decade-long slump in capital inflows.
Osifo described the move as “a direct attack” on the legislation and questioned what message it sends to international investors when statutory frameworks can be set aside by presidential decree.
“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?” he said. “This is an aberration. This should never have happened.”
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The union leader challenged the accuracy of claims underpinning the directive, noting that actual revenue flows to certain accounts amount to less than two percent of total receipts.
He also clarified that the 30 percent allocation for the Frontier Exploration Fund does not go to NNPC Limited directly but into a separate designated account. “Some provisions in the EO did not tell the entire truth,” he said.
Osifo stressed that royalties are already paid into federal government accounts, not into the personal coffers of regulatory officials, countering any implication that the current system lacks transparency or accountability.
PENGASSAN was not consulted before the order was issued, Osifo said. The union had been informed that the administration was preparing a bill to amend the Petroleum Industry Act through the legislative process. Instead, the change came as an executive order. “We were not carried along in any way,” he said.
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The union played a central role in shaping the 2021 law, which was designed to bring predictability to a sector that had hemorrhaged investment for nearly ten years. Osifo said the industry needed stable rules to function. “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,” he said.
Without that stability, he warned, capital will migrate to jurisdictions where policy doesn’t shift suddenly. “If you don’t stabilise your own environment, the investors will take their money elsewhere.”
Oil and gas remain Nigeria’s primary source of foreign exchange, and any disruption to production or export flows carries immediate consequences for the national currency. “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,” Osifo said. “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.”
The sector is capital-intensive to an extreme degree. Offshore drilling rigs can cost up to $1.5 million per day to operate, Osifo noted, underscoring the scale of investment required to maintain or expand production. “It is not a one-dollar business. It is a multi-billion-dollar industry. That is why we must not allow investors to flee.”
Nigeria’s oil production has declined in recent years due to underinvestment, aging infrastructure and operational inefficiencies.
The Petroleum Industry Act was intended to reverse that trajectory by clarifying fiscal terms, streamlining regulatory processes and providing legal certainty for upstream, midstream and downstream operations.
