Nigeria’s federal government has quietly revised how it intends to enforce Executive Order 9 of 2026, softening its initial plan for the direct remittance of oil revenues and allowing the Nigerian National Petroleum Company Limited (NNPC) to continue commercialising crude before proceeds are paid into a newly created account at the Central Bank of Nigeria.
The adjustment follows high-level deliberations last week over practical obstacles to the order, which had mandated that all royalty oil, tax oil, profit oil and gas revenues due to the federation be paid directly into the Federation Account.
Two senior officials familiar with the talks, speaking on condition of anonymity, said the government was unlikely to rescind the directive signed by President Bola Tinubu last month. Instead, they said, it had begun recalibrating the mechanics of enforcement to reflect what one described as “industry realities”.
Under the original order, royalties and taxes — often settled in barrels of crude rather than cash — were to be remitted directly. But officials conceded that crude must first be lifted and sold before revenue can be realised.
“The order is not being reversed,” one source said. “But royalties and taxes are not paid in dollars or naira. They are paid in barrels of crude oil, which must first be commercialised. So the NNPC will continue to lift and sell the crude on behalf of the government and then remit proceeds accordingly.”
Under the evolving framework, revenues will pass through a new account domiciled at the central bank and supervised by the office of the accountant-general of the federation, rather than flowing solely through existing regulatory channels.
The executive order also scrapped the 30% Frontier Exploration Fund established under the Petroleum Industry Act and discontinued the 30% management fee on profit oil and gas retained by NNPC. Effective from 13 February 2026, the directive was framed as a corrective measure to curb what Tinubu described as “excessive deductions, overlapping funds, and structural distortions” that had weakened remittances.
Invoking section 5 of the constitution, read alongside section 44(3), which vests control of mineral resources in the federation, the president argued that revenues intended for federal, state and local governments had become “trapped in layers of charges and retention mechanisms”.
Yet behind the scenes, officials acknowledge that the new structure could unsettle reforms introduced under the Petroleum Industry Act, which granted NNPC commercial autonomy and sought to insulate it from the fiscal bottlenecks of the past.
One official warned that routing all profit oil through government before reimbursing operational costs risked recreating pre-PIA funding strains. “Before the PIA, government would take everything and the company would wait for cash calls. It led to billions of dollars in arrears,” he said, referring to a period when joint venture partners were reportedly owed more than $6bn.
Another senior official cautioned that tighter central control could erode regulatory independence and efficiency. “Regulatory agencies are supposed to operate independently. What we are seeing is increasing interference,” he said, drawing parallels with refinery maintenance funds during the presidency of Olusegun Obasanjo, which were allegedly diverted with reimbursement promises that never materialised.
The removal of frontier exploration funding has also alarmed industry observers, who argue that such high-risk exploration is typically a sovereign responsibility. Without it, one official warned, Nigeria could become increasingly reliant on existing reserves, with long-term implications for energy security.
Labour concerns are also emerging. An NNPC official said the directive could disrupt production sharing contract operations across 39 sites — 14 of them producing — and affect between 400 and 500 specialised personnel working on rigs, platforms, seismic surveys and cost monitoring. Five major sites, the official noted, account for nearly 80% of output under such arrangements.
A fresh high-level meeting involving the Nigerian Upstream Petroleum Regulatory Commission, the finance ministry and industry operators is scheduled for later this week.
In a statement on Monday, the minister of finance and coordinating minister of the economy, Wale Edun, confirmed a phased transition. Direct contractor payments into the Federation Account, he said, would be implemented “in a manner that respects existing contractual and financing arrangements, and maintains investor confidence”.
Until detailed guidelines are issued, contractors will continue remitting under the current process. A technical subcommittee has been tasked with producing implementation guidelines within three weeks and commencing a review of the Petroleum Industry Act to address what the ministry described as fiscal anomalies.
For some economists, the revised framework promises a simpler outcome: more money flowing into the Federation Account. Sheriffdeen Tella, professor of economics at Babcock University, said the order could increase funds available for distribution to states — though whether that translates into tangible development remains an open question.
“It means there would be more money to share,” he said. “The issue is how effectively it will be used.”
