President Bola Tinubu has approved the cancellation of a significant portion of the Nigerian National Petroleum Company Limited’s outstanding debt to the Federation Account, wiping off about $1.42 billion and N5.57 trillion following a reconciliation of records between both parties.
The approval was disclosed 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).
According to the report, debts earlier reported at the October 2025 FAAC meeting stood at $1.48bn and N6.33tn, covering obligations from Production Sharing Contracts (PSC), Direct Sale Direct Purchase (DSDP), Royalty Adjustments (RA), Modified Carry Agreements (MCA) liftings, joint venture royalties and PSC royalty receivables.
However, the NUPRC said the Presidency has now approved that most of these balances be removed from the Federation’s books. The document stated that the approval followed submissions by the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation, which reviewed legacy liabilities up to December 31, 2024.
A breakdown showed that $1.42bn out of $1.48bn and N5.57tn out of N6.33tn were written off, representing about 96 per cent of the dollar-denominated debt and 88 per cent of the naira obligations. The commission confirmed that the appropriate accounting entries had already been effected in the Federation Account.
Despite the clearance of legacy debts, the NUPRC disclosed that fresh obligations accumulated in 2025 remain outstanding. Statutory liabilities between January and October 2025 stood at $56.8m and N1.02tn, arising from PSC and MCA liftings as well as joint venture royalty receivables.
The regulator said $55m was recovered from the dollar component during the month under review, leaving a balance of $1.8m, while the naira obligations remain unpaid.
The approval effectively resolves long-standing disputes over NNPC’s historical indebtedness to the Federation, even as current liabilities from ongoing operations continue to be tracked for recovery.
However, the debt write-off comes amid weak revenue performance by the upstream regulator. Data from the report showed that against a monthly revenue target of N1.204tn for November 2025, the NUPRC recorded N660.04bn, leaving a shortfall of N544.76bn.
Royalty collections accounted for most of the gap, with N605.26bn realised against a target of N1.14tn. Cumulatively, total approved revenue for 2025 stood at N13.25tn, while actual collections as of November were N7.60tn, leaving a deficit of N5.65tn.
The development comes amid renewed scrutiny of oil revenue remittances, following a revived dispute between NNPC Ltd and Periscope Consulting, the audit firm engaged by the Nigeria Governors’ Forum to probe alleged under-remittance of $42.37bn between 2011 and 2017.