The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has called on President Bola Tinubu to withdraw the recent Executive Order that directs oil and gas revenues straight into the Federation Account, warning it could put around 4,000 jobs at risk and destabilise the industry.
Speaking to journalists in Lagos, PENGASSAN President Festus Osifo said the order goes against the Petroleum Industry Act of 2021, which was meant to reform and stabilise the sector.
He also questioned what message this sends to investors.
“What are we telling the investors? What are we telling the international community? That just with an executive order, you can set aside the law of the land? This is an aberration. This should never have happened. The actual percentage that gets there eventually is somewhere below two percent and the 30 percent Frontier Exploration Fund does not go directly to NNPC Limited but into a designated Frontier Exploration Account. Some provisions in the EO did not tell the entire truth,” he said.
Osifo explained that statutory royalties go into government coffers, not to regulators personally. He warned that if the order stays, workers could soon lose their jobs.
“If this is allowed to sit through the way it is today, in the next few months, our members are in danger of being declared redundant because the company may not be able to meet their obligations,” he said.
Reflecting on the long process that led to the Petroleum Industry Act, Osifo said the law was designed to bring stability after years of falling investment.
“We had to believe that with that piece of legislation, there would be some level of certainty in the industry. The people who are coming to invest will know what the rules of engagement are. If you don’t stabilise your own environment, the investors will take their money elsewhere,” he added.
He stressed the importance of oil and gas to Nigeria’s economy.
“Our major revenue earner as a country is oil and gas. The more money we earn from the industry, the more we can defend our naira. If production is impacted and foreign exchange earnings reduce, it will affect our exchange rate, and once the exchange rate is impacted, it will affect our pockets,” he said.
Describing the sector as capital intensive, Osifo noted that some drilling rigs cost up to $1.5 million per day.
“It is not a one-dollar business. It is a multi-billion-dollar industry. That is why we must not allow investors to flee,” he said.
He added that the union had expected a formal amendment bill, not an executive order.
“The information at our disposal was that there was going to be a bill. But instead of a bill, it came as an executive order. We were not carried along in any way,” Osifo said.
