By The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has raised serious concerns over escalating insecurity in the country’s oil-producing regions, particularly along the waterways, warning that it is driving multinational oil companies to divest from Nigeria—even as the Federal Government rolls out cost-saving reforms.
At a press briefing in Abuja, PENGASSAN President, Comrade Festus Osifo, stated that the recently signed Upstream Petroleum Operations Cost Efficiency Incentives Order (2025) by President Bola Tinubu, though laudable, fails to confront the core issue fuelling high production costs: insecurity.
“The chief reason most international oil and gas operators have left Nigeria is principally insecurity,” Osifo declared. “The cost of securing infrastructure in the Nigerian oil and gas industry has become prohibitive. That’s why countries like Mozambique, Guyana, Angola, and Congo are now more attractive investment destinations.”
The Executive Order, signed in May, introduces performance-based tax credits of up to 20% for upstream companies that meet prescribed cost-efficiency benchmarks. However, Osifo insisted that unless the government assumes full responsibility for protecting oil installations, the high cost of doing business in Nigeria’s petroleum sector would persist.
“For a single offshore installation, you require three or four security vessels, each manned by naval personnel and paid for by the companies daily. That’s not the case in Ghana, where the state provides such protection,” he explained.
He stressed that oil companies should not continue footing the bill for security, which he said runs into “hundreds of millions of dollars annually.” The burden, he argued, discourages further investment and leads to the gradual exit of key players from Nigeria’s oil landscape.
Beyond insecurity, PENGASSAN also questioned the lack of transparency in petrol pricing. According to Osifo, even when global crude oil prices fell from $80 to around $60 per barrel, the corresponding pump price in Nigeria remained disproportionately high.
“When crude was at $60 per barrel, we should have been paying N700 to N750 per litre of petrol, not N900. Nigerians were exploited,” he lamented, urging the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to take urgent action to ensure price fairness.
The union further advised the Federal Government to consider the NLNG model for revitalising the country’s dormant refineries — particularly the Port Harcourt refinery, recently shut down for maintenance. Under this model, the government would retain a minority stake while majority control is granted to experienced private and international oil companies.
“This model has succeeded with the NLNG. Why can’t we adopt the same for our refineries to eliminate political interference and improve operational efficiency?” Osifo asked.
He also highlighted progress in local content enforcement, revealing that PENGASSAN recently signed an agreement with Sterling Oil Company to reduce the influx of expatriates and ensure that Nigerian workers are trained to occupy critical roles.
As the country marked Democracy Day, Osifo urged the Federal Government to reflect on the spirit of 12 June by prioritising citizens’ welfare.
“Democracy should translate to food on the table, access to quality healthcare, education, and decent jobs. After 26 years of uninterrupted democracy, it’s unacceptable that we still struggle with basic needs,” he said.
While commending President Tinubu for honouring some pro-democracy figures during his Democracy Day address, Osifo expressed disappointment over the exclusion of PENGASSAN stalwarts like Comrade Gani Odunaike and Comrade Milton Dabibi, who stood firm during the 1990s military dictatorship.
“PENGASSAN and NUPENG were banned in 1994 because our leaders refused to call off a strike until justice was done. These men deserve recognition as true heroes of Nigeria’s democratic journey,” he asserted.
PENGASSAN’s president concluded by urging the Federal Government to demonstrate real commitment to economic reform through concrete action on insecurity, fuel pricing abuse, and refinery revitalisation.
“Solidarity forever,” Osifo echoed — a rallying cry that underscored the union’s enduring fight for justice, transparency, and equity in Nigeria’s oil and gas sector.
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