Unlike the usual deficits that define the national budgets, the Petroleum Technology Development Fund (PTDF) has recorded an accrued surplus of unused funds for capital expenditures and capacity building programmes totalling N62 billion by 2016. However, the recurrent expenses increased by 137% from N3.85 billion to N9.14 billion between 2012 and 2016.
Besides, it is unfortunate that these huge and increasing administrative costs are used to managing lesser funds related to the core objectives of the PTDF. The core expenses had dropped by 14% from N20,715 billion to N17,842 billion within the same period.
In 2012, Administrative expenses was one-fifth (⅕) of the core expenses, but by 2017, it had risen to half (½) of the core expenses. The management costs of the fund also increased from 16% to 34% of the total expenditure within the period even though the fund managers were achieving less performance in terms of fund disbursement for its original purposes.
It would have been favourable financially if the PTDF handlers had been frugal with expenditures on its administrative concerns. Instead, recurrent expenses increased at the expense of the core capital and capacity-building expenses. Unfortunately, it is counterproductive to withhold funds meant for capital projects, specialized training and skill acquisition, which are needed to scale up the level of expertise of locals in the oil sector, which is the only reason the fund was set up in the first place.
Prior to the establishment of PTDF, there existed the Gulf Oil Company Fund, but the Act that established it was repealed by the promulgation of Act No 25 of 1973 establishing the Petroleum Technology Development Fund (PTDF) as a Fund for the purpose of training and education of Nigerians in the oil and gas industry. The Act provides that all signature bonuses should be credited into the PTDF account. However, the Federal Government has pegged the sum of $100,000,000 (One Hundred Million Dollars) as the annual fund to the Agency.
Signature Bonus is an upfront payment made to the Government through the Department of Petroleum Resources for the right to develop a block commercially after a Company wins a Bid round for an oil block.
Revenue Sources of the PTDF (2012-2016)
Between 2012- 2016, it could be gathered from the NEITI report that the sources of revenue to PTDF were Signature Bonus/Oil Block Concession allocation, Local and foreign currency Investment income, Tenders/Contractors fee and others, with signature bonus/oil block concession allocation accounting for 92% of the total revenue.
Underfunding of the PTDF
From table 2 below, Only 54% of the signature reserve account has been credited to the PTDF as revenue between 2012 -2016. This is contrary to the PTDF establishment act that stipulates that all signature bonuses be credited to the PTDF account. These under-remitted funds are so significant to the mainstay of the PTDF because the signature bonus is the main source of revenue to the fund, contributing 92% of revenues to its coffers between 2012 and 2016.
Underutilisation of Revenue by the PTDF (2012-2016)
PTDF’s failure to disburse funds for several core operating expenses leaves a huge amount of cash balances unutilized. These unutilized cash balances (or gross surpluses) totalled N7.75 billion between 2012 and 2016. 
Apart from year 2012 when the PTDF had a gross deficit of N22.89 billion due to unavailability of signature bonus revenue and in 2014 when it had another gross deficit of N4.46 billion due to total expenditure exceeding total revenue, it recorded surpluses in the remaining three years 2013, 2015 and 2016, adding up to N35.1 billion. The balance of the deficits and surpluses resulted in a net surplus of N7.75 billion during the five-year period.
It can also be inferred from Table 2 that the signature bonus account alone is sufficient to run the core operating expenses and other cost expenses of PTDF. The shortfall of one hundred and three billion, seven million, four hundred and fifty-one thousand (N103,007,451,000, being the difference between N221,873,429,000 and N118,865,978,000) in revenue due to PTDF from the signature bonus account would have been enough to handle 122% of similar core operating expenditure and 88.6% of total expenditure of PTDF within the same 2012-2016 period, shown in Table 3.
This deficit of N103 billion unremitted fund by the Federal Government to the PTDF from the signature bonus account would also have been enough to fund 348% of scholar related expenses, or 241% of PTDF assisted project within the 2012-2016 period.
As shown in Table 4 below, the gross surplus in 2013 would have been enough to handle an additional 93% of similar scholarly related expenses which includes undergraduate, MSc and PhD scholarship at home and overseas, or an additional 53% of similar PTDF assisted projects and related expenses which include developing and upgrading local institutions that are used to provide training and education in Nigeria. Similarly, the surplus of 2013 would have been enough to handle an additional 174% of similar training in the same year.
In 2015, the gross surplus would have been enough to handle an additional similar scholar related expenses, PTDF assisted projects, and training expenses by 213%, 238%, and 611% respectively. In 2016, the gross surplus would have been enough to handle similar scholar related expenses, PTDF assisted project, training related expenses by 168% or 279% and 638% respectively.
Thus, the huge unutilised fund for core operating expenses each year would have increased the number of Nigerian scholars and institutions with access to funds for each category of the core cost expenses. Specifically, those surplus unutilised funds would have provided an additional 95% of the total amount spent on core expenditures in 2015 and an additional 89% of the same in 2016.
Those affected by the underfunding and underutilisation of these funds include undergraduate and graduate candidates seeking opportunities to study in standard and suitable institutions, and researchers seeking to share their research ideas or learn new skills at workshops and conferences, away from the dilapidated science laboratories, art studios, and the usually unconducive learning environment that the PTDF is meant to fix.
To achieve the PTDF’s objective to train and make available skilled, competent and qualified manpower for the oil and gas sector, the Federal Government through the PTDF need to provide appropriate funds and resources. Also, proper impact assessment of scholarships and other forms of funding on the oil and gas industry will be necessary to ascertain how prepared Nigerians are in fully and independently running the industry from pre-exploration to marketing.
While the Oil and Gas industry currently remains the revenue backbone of the country, adequate measures must be taken to develop the technical expertise of the Nigerian actors in the oil and gas industry in Nigeria, thereby raising the industry standard, reducing expatriate remittances and increasing output.
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