PIA: PENGASSAN urges Tinubu to recall executive order, calls It direct attack on Act
By Eberechi Obinagwam
The President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), Festus Osifo, has called on President Bola Ahmed Tinubu to immediately recall the executive order on the Petroleum Industry Act (PIA), warning that it jeopardizes the gains made in the industry since the Act was enacted in August 2021.
President Tinubu signed the executive order on Wednesday, directing that all oil and gas revenues—including royalties, taxes, profit oil, and profit gas—be channeled directly to the Federation Account. The directive, anchored on Section 5 of the 1999 Constitution (as amended) and Section 44(3), which vests ownership and control of mineral resources in the Federal Government, aims to restore the constitutional revenue entitlements of federal, state, and local governments. The administration argues these entitlements were significantly eroded under the PIA framework.
Speaking at a press conference at PENGASSAN headquarters in Lagos on Thursday, Osifo described the order as a direct attack on key provisions of the PIA, particularly Sections 8, 9, and 64.
He said the order would deter foreign investors by introducing uncertainty.
“When the PIA was passed, it had some limitations. We acknowledge that. No law in the world is 100% perfect,” Osifo said. “But we believed that piece of legislation would bring certainty to the industry, so investors would know the rules of engagement.
“As you recall, investment in the industry declined drastically in the 10 years before the PIA was enacted. The number of rigs—what we refer to as rig counts—dropped significantly due to uncertainty. When the PIA came, investments began trickling in. But recent events are troubling, including what was released to the press yesterday evening by Bayo Onanuga.”
Osifo acknowledged the president’s authority to issue executive orders and duty to safeguard the industry but insisted the president had been misled by advisers.
“We strongly believe the people advising the president did not tell him the entire truth,” he said. “The president we know travels the world to attract investment and moves across the country and globe to bring in investors so Nigeria’s economy can thrive. If he had been exposed to the full truth about this executive order, he would have acted differently.
“Having worked in the industry— including at ExxonMobil—and understanding how it has evolved, he wouldn’t have signed it. Executive orders cannot supersede the law of the land or override provisions of an Act. It’s like the president waking up tomorrow and issuing an order to reduce the government’s pension contribution from 10% to 2%. That can’t happen.”
Osifo called the order an aberration. “This should never have happened. At this time, the president is telling Nigeria and the international community that he can sit down one day and use an executive order to set aside even the grand law—the Constitution—or extant laws enacted by the National Assembly. This is not correct.
“That’s why we believe he was misled. If this stands, the international community and investors will lose faith in the PIA. They will think that the royalties they pay today could be jacked up tomorrow by another executive order.”
On the 30% Frontier Exploration Fund, Osifo said claims about it were inaccurate. “It is not correct in any way. The actual percentage that gets to NNPC eventually is somewhere below 2%. The calculations are right there.”
He expressed concern for PENGASSAN members in NNPC. “Beyond setting aside a law that took Nigeria over 10 years to enact, we are bothered because we have nearly 4,000 members working in NNPC. If this is allowed to stand, in the next few months our members could face redundancy as the company may struggle to meet its obligations. This will bring serious challenges to the industry.”
Osifo noted there was no prior information about the order, though the union had been preparing for potential executive action.
He said PENGASSAN would continue engagements with sister unions from now through next week to determine the next line of action. “Our interest is that this industry will survive.”
