The Oil and Gas Governance Practice Group of Olisa Agbakoba Legal (OAL) has hailed President Bola Ahmed Tinubu for signing an Executive Order mandating the direct remittance of oil and gas revenues to the Federation Account, describing the move as a decisive step toward reclaiming Nigeria’s fiscal sovereignty.
In a detailed letter jointly signed by Dr Olisa Agbakoba and Colins Okeke, dated February 19, 2026, and addressed to the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, who chairs the Implementation Committee on the Executive Order, the group commended the administration for what it called a “landmark intervention” in Nigeria’s oil and gas governance framework.
OAL argued that for years, Nigeria’s sovereignty over its petroleum resources had been weakened by layers of deductions and structural arrangements that significantly reduced remittances into the Federation Account.
It maintained that the new order by Tinubu begins the process of restoring revenues constitutionally for the federal, state and local governments under Section 162 of the 1999 Constitution (as amended), which mandates that all revenues of the Federation be paid directly into the Federation Account.
The group said the Executive Order validates years of its advocacy for reforms in the oil and gas sector. It noted that in several published analyses and policy interventions, it had consistently raised concerns about what it described as structural conflicts within the Petroleum Industry Act (PIA) framework, particularly the dual role of the Nigerian National Petroleum Company (NNPC) Limited as both concessionaire and commercial operator.
According to OAL, the Executive Order directly addresses some of these concerns by eliminating what it described as unjustified management fees on Profit Oil and Profit Gas, redirecting proceeds of the Frontier Exploration Fund to the Federation Account, mandating direct payment of Royalty Oil, Tax Oil, Profit Oil and Profit Gas by operators, and suspending gas flare penalty payments into designated infrastructure funds.
It said these measures have the potential to unlock substantial incremental revenues, strengthen public finances at all three tiers of government, and improve transparency and accountability in the oil and gas sector at a time of mounting debt pressures and constrained public investment.
However, while applauding the Executive Order as “revolutionary,” the group argued that it does not go far enough.
First, OAL contended that the legal and structural status of Nigerian National Petroleum Company Limited remains ambiguous.
It called for the full privatisation of NNPC, insisting that the government should exit commercial participation in oil and gas exploration and production and limit its role to collecting rents and taxes.
According to the group, NNPC has historically absorbed between 50 and 70 per cent of public oil and gas revenue through statutory and structural mechanisms.
It urged the Implementation Committee to recommend a clear pathway for the privatisation or sale of the national oil company as part of the broader reform process.
Second, OAL argued that while the Executive Order mandates direct remittance of revenues under Production Sharing Contracts (PSCs), it leaves intact the underlying Joint Venture (JV) and PSC structures that determine how much accrues to the Federation.
It maintained that under existing JV and PSC arrangements, international oil companies retain significant control over cost structures and production decisions, thereby affecting the Federation’s net revenue.
It said that simply redirecting payment channels to the Federation Account does not address the core economic architecture of those contracts.
To that end, the group proposed a phased withdrawal from JV and PSC arrangements with international oil companies over a structured transition period.
It said such an approach would respect Nigeria’s treaty obligations and investor expectations while gradually translating constitutional ownership of petroleum resources into greater economic returns for the country.
OAL also urged that the identified gaps be addressed as part of the announced comprehensive review of the Petroleum Industry Act, pledging to make its expertise available to the Implementation Committee.
