A sweeping presidential directive has cleared the vast majority of legacy debts owed by the Nigerian National Petroleum Company Limited (NNPC) to the Federation Account, with about 96% of its dollar-denominated obligations written off.
President Bola Tinubu approved the cancellation of approximately $1.42 billion and N5.57 trillion after a reconciliation of accounts, effectively resolving long-standing disputes over the national oil company’s remittances.
The approval, detailed in a report from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), followed the recommendations of the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation.
The committee reviewed the company’s liabilities related to Production Sharing Contracts, Direct Sale Direct Purchase arrangements, and royalty receivables up to December 31, 2024.
According to the NUPRC document presented at the November meeting of the Federation Account Allocation Committee (FAAC), the debts previously stood at $1.48 billion and N6.33 trillion. The presidential approval specifically “nil[led] off” $1.42 billion and N5.57 trillion of these amounts, constituting the bulk of the outstanding obligations.
While the move clears legacy balances, the report highlights that fresh debts have accumulated in 2025. Statutory obligations from January to October 2025 remain at $56.8 million and N1.02 trillion. A portion of this ($55 million) was recovered in November, but significant new liabilities continue to be tracked for future recovery.
The NUPRC confirmed it has “passed the appropriate accounting entries as approved,” implementing the directive in the Federation Account.
The debt cancellation comes at a time when the NUPRC is struggling with significant revenue shortfalls. Data from the same report shows that against a monthly revenue target of N1.2 trillion, the commission collected only N660 billion in November 2025—a shortfall of N544.7 billion. Cumulatively for the year, there is a revenue gap of N5.65 trillion.
This action also unfolds against the backdrop of a major, unresolved audit dispute. The Nigeria Governors’ Forum had hired Periscope Consulting to examine NNPC remittances, and the firm alleged an under-remittance of $42.37 billion between 2011 and 2017. NNPC has formally rejected these findings, insisting all revenues were properly accounted for.
The FAAC has mandated a joint reconciliation to close the matter, which remains a “work in progress.”
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