New Executive Order On Oil And Gas Sector Portends Great Danger For Industry, Job Security- PENGASSAN

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has expressed deep concern over wednesday’s Executive Order signed by President Bola Ahmed Tinubu, mandating that all royalties, taxes, profit on oil, profit on gas should henceforth be paid directly to the federation account, warning that the directive could potentially destabilise the oil and gas sector, a development he says potends great danger for job security with likely impact on members of its association working with the Nigerian National Petroleum Company Limited (NNPC).

Addressing journalists in lagos thursday, President of PENGASSAN, Festus Osifo, said the union was “troubled” by the order, which was reportedly issued under the guise to safeguard Federation oil and gas revenues and provide regulatory clarity.

Osifo stated that while the President has constitutional powers to issue executive orders, such powers he declared must be issued not in contradiction to existing legislations, particularly as it relates to the Petroleum Industry Act (PIA), which he described as the product of years of painstaking stakeholder engagement.

“We strongly believe that in this particular case, Mr. President has been misled. The people advising him did not present the full picture. The President we know is travelling across the world to attract investment into Nigeria. If he had been exposed to the entire truth, he would have acted differently,” Osifo said.

He recalled that PENGASSAN, alongside its sister union, the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), the Nigeria Employers’ Consultative Association (NECA), the Oil Producers Trade Section (OPTS), and the national oil company, played active roles during the formulation of the PIA.

According to him, the union participated in public hearings and engaged principal officers of the National Assembly to ensure the legislation is shaped in such ways to help stabilise the oil and gas industry, incentivise investment, and provide regulatory certainty.

“There is no law that is 100 per cent perfect. We acknowledge that the PIA has its limitations. But we believed that with that law in place, investors would have clarity on the rules of engagement,” he said.

Osifo noted that before the enactment of the PIA, investment in Nigeria’s oil and gas sector had declined sharply for nearly a decade due to regulatory uncertainty. Rig counts, he said, dropped significantly as international oil companies and indigenous operators redirected capital to other jurisdictions.

“When the PIA came, we began to see investments trickling back. But recent developments, especially this executive order, are sending troubling signals to investors,” he added.

The PENGASSAN president argued that the executive order directly conflicts with Sections 8, 9 and 64 of the PIA, insisting that an executive directive cannot supersede an Act of the National Assembly.

“Executive orders cannot override the law of the land. It’s like the President waking up to set aside the Constitution or alter statutory pension contributions through an executive orders. It cannot stand,” he said.

He warned that such actions could erode investor confidence and portray Nigeria as a country where laws can be set aside at will.

“What are we telling the international community by this hurriedly signed executive order? What signal are we sending—that a duly enacted law can be set aside by executive fiat? This is an aberration and should never have happened,” Osifo stated.

Beyond the legal implications, PENGASSAN raised fears over the potential impact on jobs within the industry, particularly at NNPC.

“Our primary interest is the survival of this industry. This sector has sustained Nigeria’s economy for over 50 years. If the industry is destabilised, our members’ jobs are at risk. When investment declines, operations shrink, and when operations shrink, workers are the first casualties,” Osifo warned.

He stressed that safeguarding regulatory certainty is critical to protecting employment, growing union membership, and ensuring long-term sustainability of the sector.

PENGASSAN called for an urgent review of the executive order and renewed stakeholder consultations to prevent further uncertainty in the industry.

“We must do everything possible to protect this industry. When the industry grows, our members’ jobs are safeguarded. That is our ultimate concern,” Osifo said.

The new executive order signed by President Bola Tinubu on Wednesday also provide that NNPC will no longer collect the 30% frontier exploration fund or the 30% management fee on profit oil and gas, the executive order also provides that payment of gas flare penalties into the midstream and downstream gas infrastructure fund, (MDGIF) are now suspended under the new executive order, with proceeds going directly to the federation account instead.

The presidency had on Wednesday noted that the goal of the new executive order by president bola tinubu is to curb revenue leakages, enhance transparency, and reposition NNPC as a commercial enterprise. The new order according to the presidency also aims to restore constitutional revenue entitlements to federal, states, and local governments across the country.