President Bola Tinubu has approved the cancellation of a significant portion of debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account, wiping off about $1.42bn and N5.57tn following a reconciliation of records between both parties.
The approval is contained in a document prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November meeting of the Federation Account Allocation Committee (FAAC). The report, titled “Report of October 2025 Revenue Collection Presented at the Federation Account Allocation Committee Meeting Held on 18th November 2025,” was obtained by The PUNCH on Sunday.
According to the document, NNPC Ltd’s outstanding obligations as earlier reported at the October 2025 FAAC meeting stood at $1.48bn and N6.33tn, covering Production Sharing Contracts (PSC), Direct Sale Direct Purchase (DSDP), Repayment Agreements (RA), Modified Carry Arrangements (MCA), joint venture liabilities and royalty receivables.
However, the NUPRC disclosed that the Presidency had approved the removal of most of the balances from the Federation’s books.
The report stated, “The commission recently received a Presidential Approval to nil off the outstanding obligations of NNPC Ltd as at 31st December 2024 as submitted by the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation.”
A breakdown of the figures showed that $1.42bn and N5.57tn of the earlier reported obligations were written off, representing about 96 per cent of the dollar-denominated debt and 88 per cent of the naira-denominated liabilities. The commission confirmed that the appropriate accounting entries had already been passed in line with the approval.
Despite the clearance of the legacy debts, fresh obligations accumulated in 2025 remain outstanding. The regulator disclosed that statutory liabilities incurred between January and October 2025 stood at $56.81m and N1.02tn.
While $55m of the dollar component was recovered during the month under review, a balance of $1.8m and N1.02tn remains outstanding. The recovered amount was included in the revenue shared by the Federation for the month.
Although the debt write-off effectively settles long-standing disputes over NNPC’s historical liabilities, it comes at a time when the NUPRC is struggling to meet its revenue targets.
The document revealed that against a 2025 approved monthly revenue target of N1.204tn, actual collections for November 2025 stood at N660.04bn, leaving a shortfall of N544.76bn.
Royalty collections, which account for the bulk of upstream revenues, were particularly affected. While the approved monthly royalty projection was N1.144tn, actual collections stood at N605.26bn, resulting in a deficit of N538.92bn.
Cumulatively, as of November 30, 2025, the NUPRC had an approved revenue target of N13.25tn, but actual collections stood at N7.60tn, leaving a gap of N5.65tn. For royalties alone, the cumulative shortfall was N5.63tn.
The report also showed a month-on-month decline in revenue, with collections dropping from N873.10bn in October to N660.04bn in November.
Meanwhile, disputes over historical oil revenue remittances remain unresolved. The PUNCH recalled that NNPC Ltd is locked in a disagreement with Periscope Consulting, an audit firm engaged by the Nigeria Governors’ Forum, over alleged under-remittance of $42.37bn between 2011 and 2017.
While NNPC Ltd insists that all revenues due to the Federation for the period were fully accounted for, Periscope Consulting maintains that its audit uncovered significant gaps in remittances. The disagreement has prompted FAAC to mandate a joint reconciliation session, which remains ongoing.
Commenting on the issue earlier, Prof. Wumi Iledare, Emeritus Professor of Petroleum Economics, described the controversy as a legacy problem rooted in Nigeria’s pre–Petroleum Industry Act framework. He stressed that only strict implementation of the PIA, real-time monitoring and independent audits can prevent similar disputes in the future.
The World Bank has also repeatedly raised concerns about transparency in NNPC Ltd’s remittances, accusing the company of failing to fully transfer oil revenues to the Federation Account and retaining a significant portion of gains from subsidy removal.
Despite these concerns, NNPC Ltd’s Group Chief Executive Officer, Bayo Ojulari, has continued to assure Nigerians and international investors of the company’s commitment to transparency, accountability and full compliance with fiscal rules.
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