News Investigators/ A group, the Oil and Gas Governance Practice Group, has urged the Federal Government to ensure a structured withdrawal from Joint Venture (JV) and Production Sharing Contract (PSC) arrangements with International Oil Companies.
Olisa Agbakoba, a renowned lawyer made the call on Monday in a submission he signed on behalf of the group, through the Olisa Agbakoba Legal Practitioners (OAL).
Mr Agbakoba, a Senior Advocacte of Nigeria (SAN), said it should be a legislatively backed and phased withdraw from JV and PSC.
The submission was sent to the Implementation Committee on the Executive Order on Direct Remittance of Oil and Gas Revenues to the Federation Account.
The News Agency of Nigeria (NAN) reports that President Bola Tinubu had recently signed the executive order on the direct payment of pul anvgas revenue into the Federation Account.
The Federation Account would be chaired by Mr Wale Edun, the Minister of Finance and Coordinating Minister of the Economy.
The order eliminates the management fees on Profit Oil and Profit Gas.
It also redirects Frontier Exploration Fund proceeds to the Federation Account, mandating direct remittances by operators, and suspending certain gas flare penalty payments into designated funds.
Mr Agbakoba commended the reform.
He, however, said that the Order merely redirected the payment channel for revenues already contractually due and does not address the deeper structural issues embedded in existing JV and PSC frameworks.
In the submission, he said that the existing JV and PSC structures allowed cost recovery mechanisms that could suppress net revenues to the Federation and create incentives for inflated operating costs.
He, therefore, proposed a phased transition programme that would respect Nigeria’s international treaty obligations and protect legitimate investor expectations, while gradually restoring full sovereign control over petroleum resources.
He said that a properly structured transition would mitigate arbitration risks and avoid deterring future investment.
Beyond the JV and PSC reforms, Agbakoba also suggested that the Nigerian National Petroleum Company Limited (NNPC Ltd.) should ultimately be privatised.
According to him, government’s role should be limited to regulation and revenue collection rather than direct commercial participation.
“Nigeria does not need a state oil company; we have a sufficiently robust private oil sector capable of driving exploration and production.
“The role of government should be limited to collecting rents and taxes, not participating in commercial oil and gas operations.
“NNPC has, over the years, absorbed between 50 per cent and 70 per cent of public revenue from oil and gas through various statutory and structural mechanisms,” he said.
The senior lawyer urged the Implementation Committee to address these structural gaps as part of its work to ensure that the Executive Order achieved its full transformative potential in strengthening Nigeria’s fiscal sovereignty.
He described the newly signed Executive Order as a decisive step towards restoring Nigeria’s fiscal sovereignty.
Mr Agbakoba said that the landmark order represented a pivotal moment in Nigeria’s fiscal governance and a validation of the sustained advocacy for transparency in the oil and gas sector that OAL had championed over the years.
“We write to applaud President Bola Tinubu for reclaiming Nigeria’s sovereignty by signing the Executive Order on the direct remittance of oil and gas revenues to the Federation Account.
“We also write to submit our observations and recommendations to the Implementation Committee.
“For years, Nigeria’s sovereignty over its most critical natural resources has been effectively abdicated to the NNPC Ltd. through layers of unjustified deductions and to multinational companies through JV and PSC arrangements.
“These have systematically drained public revenue,” he said.
He said that the executive order began the vital work of reclaiming that sovereignty.
He said that it also began restoring to the federation the revenues constitutionally due to the Federal, State, and Local Governments under Section 162 of the Constitution
“This establishes the Federation Account and mandates that all revenues of the Federation be paid directly into it. OAL applauds the President for this decisive action.
“We have called for a comprehensive review of the PIA’s fiscal architecture to restore the constitutional entitlements of all three tiers of government. The Executive Order directly addresses these concerns.
“By the order, the President has taken a decisive step towards restoring the constitutional revenue entitlements of the federal, state, and local governments under Section 162 of the Constitution.
“Section 162 is not merely a fiscal provision; it is a constitutional command that brooks no derogation by statute, and the Executive Order is a commendable exercise in vindicating its intent,” he said.
He reaffirmed the group’s readiness to support the Committee’s work and contribute to the ongoing review of the PIA, aimed at ensuring that Nigeria’s oil and gas strengthen fiscal sustainability.
NAN