Emmanuel Addeh in Abuja 

The Nigerian National Petroleum Company Limited (NNPC Limited) recorded a significant inflow of N478.2 billion from its 30 per cent Frontier Exploration Funds (FEF) and management fees in the first seven months of 2025, according to a presentation made by the national oil company to the Federation Accounts Allocation Committee (FAAC) during the August 20 meeting.
The presentation showed that the oil company earned N239.1 billion from its frontier exploration fund within the period, while an additional N239.1 billion was realised as management fees. 
Both revenue streams are directly tied to Nigeria’s Production Sharing Contracts (PSC) arrangements, the presentation document seen by THISDAY showed. 
Section 9(4) of the Petroleum Industry Act (PIA) states that: “There shall be maintained … a Frontier Exploration Fund which shall be 30 per cent of NNPC Limited’s profit oil and profit gas as in the production sharing, profit sharing and risk service contracts.”
In the same vein, in Section 64(c), the PIA provides for NNPC’s role in lifting and selling profit oil and gas on behalf of the Federation.  “NNPC Limited shall promptly remit the proceeds of the sales of the profit oil and profit gas to the Federation, less its 30 per cent for management fees,” it states.
A breakdown revealed that N31.77 billion accrued in January, N38.3 billion in February, and N61.489 billion in March.
In April, the company earned N36.579 billion in both frontier funds and management fees, while in May it was N38.79 billion.
However, inflows fell significantly in June to N6.83 billion, but rose again in July when N25.3 billion was recorded for the two revenue streams.
This brought the cumulative total for frontier fund inflows to N239.1 billion between January and July, while management fees also matched this figure.
Together, the two streams contributed N478.2 billion to NNPC’s revenue pool in seven months.
The inflows represented an improvement in NNPC’s revenue profile, underscoring the company’s central role in financing Nigeria’s upstream expansion drive at a time when the country is continuing exploration in frontier basins such as the Chad, Benue Trough, Gongola, and Anambra basins.
The document further revealed that total PSC distributions to the federation as the share of its 40 per cent PSC funds for the period stood at over N318.8 billion.
Although the NNPC has been silent on the extent of frontier exploration, inflow into the frontier account offers a much-needed financial backing for the federal government’s ambition to expand Nigeria’s oil and gas reserves base. 
With production hovering around 1.5 million barrels per day, according to data from the Organisation of Petroleum Exporting Countries (OPEC), the NNPC is banking on new finds in frontier basins to shore up declining reserves and boost production to three million barrels per day in the medium term.
In Nasarawa, the national company spudded the Ebenyi-A well in Obi Local Government Area in March 2023, marking the state’s first official oil drilling campaign. The well lies within the Middle Benue Trough, a basin that has long been considered prospective but under-explored.

While no commercial declaration has yet been made, the indicators, according to the NNPC, are positive, with deeper exploration activities set to continue.

Bauchi State, on the other hand, hosts the more advanced Kolmani project, situated along the border with Gombe.

In November 2022, the Kolmani Integrated Development Project was formally launched with an estimated $3 billion in investments, envisioned to deliver an initial 50,000 barrels per day of crude.

In addition to the frontier fund, NNPC’s management fee of N239.1 billion in six months further strengthens the company’s financial base.

The fee is retained by the company to cover the costs of administering joint ventures and production contracts on behalf of the federation.

This means that, unlike the old arrangement where NNPC operated as a government agency relying heavily on budgetary provisions, the management fee gives it a steady stream of income independent of federal allocations. 

The July FAAC report, however, also highlighted some variance between budget projections and actual revenues. From January to July, frontier fund and management fee collections recorded shortfalls of N173.3 billion each.

Besides, while interim dividend remittances were supposed to be N552.6 billion during the seven months under consideration, they stood at N318.82 billion, recording a deficit of N233.8 billion during the period.

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