


































Energy and Earth Science 
Vol. 5, No. 1, 2022 

www.scholink.org/ojs/index.php/ees 

ISSN 2578-1359 (Print)   ISSN 2578-1367 (Online) 

1 

Short Paper 

The Nigerian Petroleum Industry Act, Frontier Basins 

Exploration and the Global Energy Transition 

Nuhu George Obaje
1*

, Abu Kasim Adamu
1
, Abdullahi Bomai

2
, Mukhtar Zanna

2
, James Adeoye

1
, Ishaq 

Yusuf
1
, Richard Dauda

2
, Faisal Musa

2
, Suleiman Adamu

2
 & Lukman Musa Adamu

1,3
 

1
 Department of Geology/Department of Biology/Nigerian National Petroleum Corporation Professorial 

Chair in Basinal Studies, Ibrahim Badamasi Babangida University, Lapai, Niger State, Nigeria 

2
 Frontier Exploration Services, Nigerian National Petroleum Corporation, Abuja, Nigeria 

3
 Department of Earth Sciences, Kogi State University, Anyigba, Kogi State, Nigeria 

*
 Nuhu George Obaje, Department of Geology/Department of Biology/Nigerian National Petroleum 

Corporation Professorial Chair in Basinal Studies, Ibrahim Badamasi Babangida University, Lapai, 

Niger State, Nigeria 

 

Received: March 10, 2022       Accepted: March 21, 2022      Online Published: April 21, 2022 

doi:10.22158/ees.v5n1p1               URL: http://dx.doi.org/10.22158/ees.v5n1p1 

 

Abstract 

The Nigerian Petroleum Industry Act (PIA) passed into Law in 2021 has the major goal to reform the 

Nigerian petroleum sector operations into policy, regulations and business (commercial). In the line of 

this, the Nigerian National Petroleum Corporation (NNPC) was transformed to NNPC Ltd to operate 

entirely commercially with a supervising Board and registration with the Corporate Affairs Commission. 

Such a commercial mandate will entail the need to explore and produce more oil and gas for export and 

domestic utilization. Oil is becoming less attractive as an energy source but gas is gaining momentum as 

a clean energy source in the global energy transition road-map. The global energy transition road-map 

is drawn around clean, alternative and renewable energies. The Nigerian frontier basins have recently 

come on board as new business opportunities with huge petroleum gas resources. These frontier basins 

comprise the Anambra, Benue, Bida, Chad (Nigerian sector), Dahomey, and Sokoto Basins as well as the 

Deep and Ultra-deep offshore. Maturing these basins through data generation and production of the gas 

resources therein will promote the nation’s gas utilization and gas expansion programmes meant to 

promote industrialization and huge employment generation, grow the economy and engender positive 

social transformation. The clause in the PIA that promotes frontier exploration is well-thought out. 

Available and required geological data needed to mature the frontier basins to producing basins are 

presented in this paper. The success made in Kolmani River-2 well discovery is a case study. 



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Keywords 

Nigeria PIA, Energy Transition, Frontier Basins, Alternative Energy 

 

1. Introduction 

The recent passing into Law of the Nigerian Petroleum Industry Act has a bearing on the ongoing 

exploration by the Nigerian National Petroleum Corporation (NNPC) which in turn allows juxtaposition 

by the present global energy transition that demands deployment of renewable and alternative clean 

energies. Economic growth in any society is anchored on the productive activities of the real sector 

whose performance is driven by energy availability. The level of economic development equally 

determines the human development indices such that in the African region, poor industrial performance 

resulting from gross energy deficit have resulted in stunted economic growth, high unemployment 

figures, and the resultant high poverty level, recurring political crises and youth restiveness. It is a 

recognized fact that availability and access to energy is a sine qua non for achieving industrialization in 

any country. Asides from the huge impact of the energy sector on employment generation, it also acts as 

catalyst for sustainable development and enhances resource efficiency. Indeed, energy is the “oxygen” of 

the global economy and the life-blood of growth in any nation. This paper has reviewed the relationship 

between the Petroleum Act, Nigeria’s frontier basins and the global energy transition and the meaning to 

the country’s economic development in a sustainable physical environment. 

 

2. Methods of Study 

This paper is generally a review of existing information and data, taken mainly from the Nigerian 

Petroleum Industry Act (2021) and the works of Obaje et al. (2004) and Obaje (2009).  

 

3. Results and Discussion 

3.1 The Nigerian Petroleum Industry Act 

The key attributes of the Nigerian Petroleum Industry Act passed into Law in July 2021 embrace the 

creation of governance structures to ensure good governance and accountability, thereby ensuring a 

commercially oriented national petroleum company that fosters conducive business environments for 

petroleum operations. In the line of this, the Nigerian Upstream Regulatory Commission responsible for 

the technical and commercial regulation of the upstream petroleum operations; and the Nigerian 

Midstream and Downstream Petroleum Regulatory Authority responsible for the technical and 

commercial regulation of the midstream and downstream operations have been created. The Commission 

and Authority are exempted from the provisions of any enactment relating to the taxation of companies 

or Trust Funds. The Nigerian National Petroleum Corporation (NNPC) has been incorporated as a 

commercial and profit focused NNPC Limited with ownership vested in the Ministry of Finance 

Incorporated (and Ministry of Petroleum Incorporated) on behalf of the Federation to take over assets, 

interests and liabilities of NNPC. This structure is expected to pave the way for eventually sale of shares 



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to Nigerians. NNPC Limited will earn 10% of proceeds of the sale of profit oil and profit gas as 

management fee while 30% will be remitted to Frontier Exploration Fund for the development of frontier 

acreages in addition to 10% of rents on petroleum prospecting licences and mining leases.  

3.2 Frontier Basins 

The clause enabling the NNPC Limited to remit 30% profit to the Frontier Exploration Fund attests to the 

desire of the Nigerian government to harness the resource opportunities in the frontier basins. Frontier 

basins are those sedimentary basins that are generally considered high-risk and under-explored and on 

which only scanty data are available. In Nigeria, these basins comprise deep and ultra-deep offshore 

Niger Delta, and the intracratonic inland sedimentary basins embracing the Anambra Basin, Benue 

Trough, Bida Basin, Chad Basin, Dahomey Basin and Sokoto Basin. Outside some portions in the 

Anambra and Dahomey Basins where some acreages have been concessionaired to Orient Petroleum 

(Anambra Basin) and Yinka Folawiyo Petroleum (Dahomey Basin), all of the remaining frontier basins 

are open acreages (Figure 1). Evaluation of potential petroleum systems and hydrocarbon proneness by 

previous workers indicate that Nigerian frontier basins constitute a huge storage of natural gas and indeed 

with estimated 75% natural gas to 25% crude oil in volumetric ratio (Obaje et al., 2004). The exploration 

success through the commercial discovery with Kolmani River-2 well drilled by the NNPC is a classical 

attestation. 

 

 

Figure 1. Delineated Blocks in Nigeria’s Sedimentary Basins Showing Allocated Acreages, 

Acreages on Offer and Open Acreages (Courtesy of defunct DPR) 

 

 

 

 



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3.3 Global Energy Transition 

The energy transition is a pathway toward transformation of the global energy sector from fossil-based to 

zero-carbon by the second half of the present century. At its heart is the need to reduce energy-related 

CO2 emissions to limit climate change. Decarbonisation of the energy sector requires urgent action on a 

global scale, and while a global energy transition is underway, further action is needed to reduce carbon 

emissions and mitigate the effects of climate change. Renewable (solar, wind, biomass) and alternative 

clean energy (natural gas) sources therefore constitute the fulcra for the global energy transition. Data 

generated over the years show that Nigerian frontier basins constitute huge storage of unproven natural 

gas and some oil. Exploring and exploiting these natural gas resources align with the current global 

energy transition to cleaner energies of which natural gas is a big player therein. Exploiting the natural 

gas resources will propel the drive towards a greener economy with the concomitant industrialization and 

employment generation. Dismissed as a useless by-product of crude oil production until the second half 

of the 20th century, natural gas now accounts for 24 percent of the world's energy consumption (IEA 

2016). And the demand is growing. An environmentally-friendly and efficient energy source, natural gas 

is the cleanest-burning conventional fuel, producing lower levels of greenhouse gas emissions than 

heavier hydrocarbon fuels such as coal and oil. Historically, natural gas also has been one of the most 

economical energy sources. Natural gas fuels electric power generators, heats buildings and is used as a 

raw material in many consumer products, such as those made of traditional plastics. The International 

Energy Agency predicts that the demand for natural gas will grow by approximately 43 percent through 

2035. 

 

 

Figure 2. Van Krevelen Diagram Plot of Hydrogen Index Against Oxygen Index Values of 

Frontier Basins Samples Studies by Obaje et al. (2004) and Obaje (2009) Showing That 

Hydrocarbon Resources in Nigeria’s Frontier Basins Are Overwhelmingly Gas 



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4. Conclusions 

The Nigerian Petroleum Industry Act (PIA) (2021) is the law guiding and driving operations of the oil 

and gas industry in Nigeria currently. It has the major goal to reform the Nigerian petroleum sector 

operations into policy, regulations and business/commercial. To this extent, state-owned company, the 

Nigerian National Petroleum Corporation (NNPC) has been transmuted into a limited liability company 

registered with the Corporate Affairs Commission. It has to now operate strictly on commercial basis and 

to declare dividends to shareholders. Such a commercial mandate will entail the need to explore and 

produce more oil and gas for export and domestic utilization. With global energy transition, oil is 

becoming less attractive as an energy source but gas is gaining momentum as a clean energy. The global 

energy transition is campaign for decarbonization and net-zero carbon focusing on clean, alternative and 

renewable energies. The Nigerian frontier basins present business opportunities with huge petroleum gas 

resources. These frontier basins comprise the Anambra, Benue, Bida, Chad (Nigerian sector), Dahomey, 

and Sokoto Basins as well as the Deep and Ultra-deep offshore. Maturing these basins through data 

generation and production of the gas resources therein will promote the nation's gas utilization and gas 

expansion programmes meant to promote industrialization and huge employment generation, grow the 

economy and engender positive social transformation. It is noteworthy that is already a clause in the PIA 

that promotes frontier exploration. This paper has attempted to present available and required geological 

data needed to mature the frontier basins to producing basins. The Nigerian National Petroleum 

Corporation has demonstrated this in the Gongola Basin exploration campaigns and the Kolmani River-2 

well commercial discovery. 

 

Acknowledgements 

The Nigerian National Petroleum Corporation is gratefully acknowledged for the endowment of the 

Basinal Studies Professorial Chair at the Ibrahim Badamasi Babangida University, Lapai, Nigeria, and 

for the appointment of the first author as the first Chair Professor.  

 

References 

Obaje, N. G. (2009). Geology and Mineral Resources of Nigeria (p. 240). Springer Verlag, Heidelberg, 

Berlin, New York. 

Obaje, N. G., Wehner, H., Scheeder, G., Abubakar, M. B., & Jauro, A. (2004). Hydrocarbon 

prospectivity of Nigeria’s inland basins: From the viewpoint of organic geochemistry and organic 

petrology. AAPG Bulletin, 87, 325-353. 

The Petroleum Industry Bill: Top 20 Changes You need to know. (2021). 7 July 2021. Permalink. 

 

 


