The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has warned the new executive order signed by President Bola Ahmed Tinubu could destabilise Nigeria’s oil and gas sector driving away much needed investment, undermine the Petroleum Industry Act (PIA), and put thousands of industry jobs at risk.
PENGASSAN President Festus Osifo said the union was “deeply troubled” by the executive order, which was announced on Wednesday, February 18 by the president’s spokesman, Bayo Onanuga.
Osifo, addressing journalists at a media engagement today, stated that while the President has constitutional authority to issue executive orders, such directives must not override existing legislation, particularly the PIA, which was enacted in 2021 after more than a decade of extensive consultations involving unions, industry operators, and lawmakers.
He noted that PENGASSAN, alongside key stakeholders including the Nigeria Union of Petroleum and Natural Gas Workers, the Nigeria Employers’ Consultative Association, and the Oil Producers Trade Section, actively participated in public hearings and engagements with the National Assembly to ensure the law would stabilise the sector and attract investment.
According to Osifo, regulatory uncertainty had previously caused significant capital flight from Nigeria’s oil and gas industry, with rig count declining sharply as international operators diverted investments to more predictable jurisdictions.
He said the PIA helped restore investor confidence by providing clarity on fiscal terms and governance structures, leading to gradual recovery in industry activity.
However, Osifo warned that the new executive order risks reversing those gains by creating the perception that statutory provisions can be altered through executive action.
“Such signals are troubling to investors and the international community,” he said, adding that confidence in the regulatory framework is critical to sustaining long-term investment in the sector.
He further argued that the order directly conflicts with key provisions of the PIA , specifically section 8, 9 and 64; which could create distrust of Nigeria’s oil and gas regulatory environment.
Beyond investment concerns, PENGASSAN warned of potential job losses, particularly among workers at the Nigerian National Petroleum Company Limited (NNPC Ltd), where thousands of Nigerians – about 4,000 in number – are currently employed.
Osifo said weakening the company’s financial stability through policy changes could lead to operational challenges and possible workforce reductions.
“Our members’ livelihoods depend on the survival and growth of this industry,” he said. “When investment declines, operations shrink, and workers become vulnerable.”
He also raised concerns about what he described as inaccuracies in the assumptions underlying the executive order, particularly regarding revenue allocation and funding mechanisms within the sector.
“The actual percentage that eventually gets to NNPC is below two percent; the calculations are there. Likewise, the claim that 30 percent of the Frontier Exploration Fund goes directly to NNPC is inaccurate.
“Those funds go into designated accounts, not into NNPC directly. It is also wrong to assume royalties go into the personal account of Nigerian Upstream Petroleum Regulatory Commission (NUPRC). Those revenues go into the Federal Government account.
Osifo urged the President to urgently review and reconsider the directive, warning that failure to do so could jeopardise Nigeria’s efforts to attract global capital into its oil and gas industry.
He expressed confidence that President Tinubu, who previously worked in the sector including at ExxonMobil, would act to protect the industry once fully briefed on the implications of the order.
PENGASSAN emphasised that maintaining legal certainty and investor confidence remains essential to protecting jobs, sustaining national revenue, and ensuring the long-term viability of Nigeria’s oil and gas sector, which has remained the backbone of the country’s economy for more than five decades.
