The Petroleum and Natural Gas Senior Staff Association of Nigeria has raised concerns over President Bola Tinubu’s recent Executive Order aimed at boosting offshore oil and gas production.

The union warned that certain provisions in the policy could weaken the enforcement of the Nigerian Oil and Gas Industry Content Development Act, potentially undermining local participation and capacity development in the sector.

Speaking at a press conference in Abuja on Monday, PENGASSAN President, Festus Osifo, stated that the tax incentives granted to oil companies by the President may not lead to meaningful cost reductions unless the prevailing security challenges in oil-producing areas are effectively addressed.

The new Executive Order titled “The Upstream Petroleum Operations Cost Efficiency Incentives Order (2025),” introduces performance-based tax incentives for upstream operators that achieve verifiable cost savings aligned with defined industry benchmarks.

However, PENGASSAN raised concerns about the provision granting a 20 per cent tax credit to oil production companies, warning that it could adversely affect industry labour dynamics and revenue allocation.

He noted that insecurity remains one of the key cost drivers in Nigeria’s upstream oil sector, with significant resources being diverted to protect production facilities.

According to Osifo, the persistent security challenges are a major factor pushing international oil and gas companies to exit Nigeria, as operating in such an environment has become increasingly unsustainable.

“This is majorly because the cost of securing facilities, the cost of securing infrastructure in the Nigerian oil and gas industry has become prohibitive.

“We are saying that this may not be far reaching. This may not really work, because there are some foundational problems, and until these foundational issues are addressed, that cost may not necessarily reduce.

“For us, the policy is quite commendable, that is quite good. But, in reducing the cost of operations, there are some inherent challenges that over the years, PENGASSAN has drawn the attention of the government to issues we want it to address squarely. And chief among these issues is the level of insecurity that we have in the oil and gas industry.

“I mean, the insecurity in Nigeria has also dovetailed into the oil and gas industry. One of the challenges that is affecting us today in Nigeria oil and gas industry is that the cost that the upstream companies spend in protecting their facilities, in protecting their infrastructure, both in land, in sea, shallow waters, deep waters, etc., is quite prohibitive,” he said

Similarly, the association has accused PMS producers and marketers of exploiting Nigerians by failing to lower fuel pump prices, despite the decline in global crude oil prices.

It also faulted regulatory agencies for abandoning their duty to safeguard consumers, alleging that they have allowed profit-driven oil companies to operate unchecked.