President Bola Tinubu has approved the cancellation of the bulk of the Nigerian National Petroleum Company Limited’s (NNPC Ltd) debts to the Federation Account, wiping off about $1.42 billion and N5.57 trillion, according to a recent report by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The report, titled “Report of October 2025 Revenue Collection Presented at the Federation Account Allocation Committee Meeting Held on 18th November 2025,” was presented at the November FAAC meeting. It confirmed that the Presidency approved the write-off following a reconciliation of NNPC’s records with the Federation Account, covering obligations up to December 31, 2024.
Previously, NNPC’s outstanding obligations were reported at $1.48 billion and N6.33 trillion for PSC, DSDP, RA & MCA liftings and JV & PSC royalty receivables. Following the presidential directive, $1.42 billion (96%) of dollar-denominated debt and N5.57 trillion (88%) of naira-denominated obligations have been removed from the Federation’s books. NUPRC has implemented the approval and passed the necessary accounting entries.
While legacy debts have been cleared, fresh obligations from 2025 remain. Statutory debts from January to October 2025 total $56.8 million and N1.02 trillion, with $55 million recovered from the dollar portion in November.
The debt cancellation comes amid ongoing challenges in revenue collection. NUPRC recorded N660.04 billion for November 2025 against a target of N1.204 trillion, leaving a shortfall of N544.76 billion. Royalty payments, which form the bulk of upstream revenue, were significantly below projections, contributing to a cumulative revenue gap of N5.65 trillion for the year.
The write-off also occurs amid a long-standing dispute between NNPC and Periscope Consulting, hired by the Nigeria Governors’ Forum to audit under-remittance of oil revenues totaling $42.37 billion (about N12.91 trillion) between 2011 and 2017. NNPC rejected Periscope’s findings, insisting all proceeds were properly accounted for, while Periscope maintained that significant gaps remained. FAAC has mandated joint reconciliation meetings between both parties to resolve the impasse.
The presidential directive effectively clears legacy debts, providing relief to the Federation Account, while NUPRC continues to track current and future NNPC liabilities for recovery.
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