| Feature |
Old PIA Framework |
New Executive Order (2026) |
| Management Fee |
NNPC retains 30% of Profit Oil/Gas. |
Scrapped. NNPC no longer collects this fee. |
| Frontier Exploration |
30% of profit oil diverted to speculative drilling. |
Redirected. Funds now go directly to the Federation Account. |
| Gas Flare Penalties |
Paid into the Midstream/Downstream Fund (MDGIF). |
Redirected. Penalties now flow to the Federation Account. |
Source: Presidency
Restoring Constitutional Supremacy
The Order is legally anchored on Section 44(3) of the Constitution, which vests ownership of all minerals in the Federal Government.
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Direct Payment: From February 13, 2026, all operators under Production Sharing Contracts (PSCs) must pay Royalties, Tax Oil, and Profit Oil directly to the Federation Account, bypassing NNPC’s treasury.
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Elimination of Duplication: The President noted that the MDGIF overlapped with the Environmental Remediation Fund (administered by NUPRC). By suspending payments to the MDGIF, the government eliminates “unjustified multiple layers of deductions.”
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Frontier Fund Review: The 30% Frontier Exploration Fund was criticized as “speculative” and a source of “large idle cash balances.” Its removal is expected to provide immediate liquidity for national priorities like healthcare and security.
Strategic Repositioning of NNPC Limited
The Executive Order marks a forced acceleration of NNPC’s transition into a purely commercial entity:
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Commercial Purity: By removing its role as a “concessionaire” that influences operating costs, the EO aims to eliminate competitive distortions. NNPC will now have to rely on its 20% profit retention for working capital, similar to global peers like Petrobras or Aramco.
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Integrated Operations: The President approved a Joint Project Team for integrated operations where upstream and midstream activities are combined, aiming to streamline the regulatory interface between the NUPRC and NMDPRA.
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Implementation Oversight: A high-powered committee led by the Minister of Finance has been tasked with ensuring the coordinated execution of this order and a wider review of the PIA.
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