President Bola Tinubu has approved the cancellation of a large portion of debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account, amounting to about $1.42bn and ₦5.57tn.
The decision followed a reconciliation exercise between NNPC Ltd and the Federation and was documented in a report prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November 2025 meeting of the Federation Account Allocation Committee (FAAC).
According to the report, NNPC’s previously recorded obligations stood at $1.48bn and ₦6.33tn, relating to production sharing contracts, royalty arrears, and crude lifting activities. However, presidential approval was granted to write off most of these balances as legacy debts as of December 31, 2024, based on the recommendations of the Stakeholder Alignment Committee.
The NUPRC disclosed that about 96 per cent of the dollar-denominated debt and roughly 88 per cent of the naira obligations were cleared, with the appropriate accounting entries already effected.
Despite the debt write-off, the commission noted that new obligations incurred by NNPC Ltd between January and October 2025 remain outstanding. These include $56.8m and ₦1.02tn, although $55m of the dollar component was recovered during the review period.
While the move resolves long-standing disputes over NNPC’s historical debts, it comes amid revenue challenges for the NUPRC. The commission recorded significant shortfalls in royalty and overall revenue collections for November 2025, falling well below approved targets.
Meanwhile, disagreements persist over alleged under-remittance of oil revenues by NNPC Ltd between 2011 and 2017, with audit firm Periscope Consulting and the national oil company holding conflicting positions. FAAC has directed both parties to undertake a joint reconciliation to resolve the matter.
The controversy underscores ongoing concerns about transparency in oil revenue management, even as NNPC Ltd’s leadership continues to pledge reforms aimed at accountability and efficiency.
