Right of Reply: Misrepresenting the Facts – Why the PENGASSAN NNPCL Branch Statement Creates Confusion, Not Clarity

By Nick Agule

A public statement attributed to the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), NNPCL Branch, requires a factual response. The statement is riddled with contradictions, misinterpretations, and outright falsehoods that risk misleading the public.

*1. On Direct Remittance of Royalties and Taxes Under PSCs*

PENGASSAN contradicts itself. It claims that all royalties and taxes are fully remitted to the Federation Account, yet simultaneously admits that part of these revenues is used by NNPCL to service debts on behalf of the government. When did NNPCL assume the role of the Debt Management Office?

The correct process is straightforward:

• NNPCL must remit 100% of all proceeds to the Federation Account.

• Debt service should be appropriated through the national budget, not deducted at source.

This is precisely the constitutional order that brings transparency and accountability in the management of the Federation’s revenues restored by the Executive Order.

*2. On Misrepresentation of the 30% PSC Profit Oil/Gas Management Fee*

PENGASSAN’s interpretation of the Executive Order is incorrect. The Order clearly states that NNPCL receives 30% of profit oil and profit gas, not 30% of total PSC revenue. Nowhere does the Order alleged that NNPCL retains 30% of the Federation’s entire oil revenue.

By insisting otherwise, PENGASSAN is constructing a strawman argument, perhaps to inflame public sentiment.

PENGASSAN further argues that NNPCL receives only 1.05% of gross PSC revenue, implying the amount is insignificant. But the issue is not the size. It is the constitutional principle. Even if the amount were 0.000001%, it is still Federation revenue and must be remitted in full as mandated by section 162(1) of the constitution.

PENGASSAN also claims that in other countries, governments fund their national oil companies through profit oil. But what has NNPCL achieved with decades of such funding?

• Refineries: dead

• Gas plants: dead

• Product pipelines: dead

• Upstream assets: limping

Meanwhile, national oil companies elsewhere – Saudi Aramco (Saudi Arabia), Petrobras (Brazil), Petronas (Malaysia), Equinor (Norway) etc – pay massive dividends to their governments and drive national development.

NNPCL argues that the management fee helps it recover costs incurred on behalf of the Federation. If so, NNPCL should invoice the Federation, not unilaterally take 30% of profit oil and profit gas without transparent accounting. No institution- Auditor-General of the Federation, National Assembly, Petroleum Ministry, or even the Presidency – has full visibility into NNPCL’s books.

NNPCL further claims that removing the 30% fee will hinder its ability to fund critical operations. But NNPCL is a limited liability company. It should raise capital like NLNG and other commercially run entities. Accessing the capital market would force transparency and end inefficiencies such as paying refinery staff who refine zero barrels of crude.

*3. Misleading Claims About the 30% Frontier Exploration Fund*

PENGASSAN asserts that the 30% Frontier Exploration Fund under Section 9 of the PIA does not go to NNPCL. This is false. Section 9(5) explicitly empowers NNPCL alone to utilise the funds in the frontier exploration escrow account, subject only to appropriation by the National Assembly.

In practice, NNPCL spends these funds without meaningful legislative oversight. It took months for the National Assembly to compel the GMD to appear, and even then, he provided no substantive information.

PENGASSAN warns that suspending the fund will threaten long-term exploration. But after decades and billions of dollars spent, not a single barrel of crude has been produced from any frontier basin. Nigeria cannot continue funding wasteful exploration while other oil-producing nations are investing petroleum revenues into renewable energy and diversified economic assets – Qatar’s 20% ownership of British Airways is a prime example.

*Soul Searching for PENGASSAN NNPCL*

The nation has entrusted enormous assets and resources to NNPCL. What has been the return?

• Refineries: Dead, causing decades of fuel scarcity, adulterated products, fires, and thousands of preventable deaths. PENGASSAN made running refineries look like rocket science which Dangote refinery has demystified.

• Gas plants: Dead, forcing Nigeria to import gas while flaring continues unabated, harming health and the environment.

• Pipelines: Dead, leading to road destruction, tanker explosions, and inflated product prices.

• Upstream: Underperforming, while peers like Saudi Aramco produce over 10 million barrels per day and Petrobras exceeds 4 million.

*Conclusion*

Every PENGASSAN NNPCL meeting should begin with a minute of silence for the countless Nigerians who have died or suffered due to the collapse of national assets under their watch. They must also reflect on the lost opportunities for national development.

PENGASSAN NNPCL must stop fixating on Federation revenues. Instead, they should focus on reviving refineries, gas plants, pipelines, and upstream assets so that- like NLNG – they can contribute dividends to the Federation Account rather than draining it.

_Nick Agule is an energy expert_