President Bola Tinubu
President Bola Tinubu has approved the cancellation of a significant portion of the Nigerian National Petroleum Company Limited’s (NNPC Ltd) outstanding debts to the Federation Account, wiping off legacy obligations valued at about $1.42 billion, alongside trillions of naira in reconciled liabilities.
The approval is contained in a document prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November 2025 Federation Account Allocation Committee (FAAC) meeting.
The decision followed the recommendations of the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation.
According to the document, the debt relief applies to obligations accumulated up to December 31, 2024, covering a range of legacy liabilities. These include Production Sharing Contracts (PSC) obligations, domestic crude oil supply commitments, repayment agreements, modified carry arrangements, as well as outstanding joint venture and PSC royalty receivables.
The reconciliation exercise was carried out by the NUPRC in collaboration with relevant stakeholders, with the outcome formally adopted by the committee. Corresponding accounting adjustments have already been reflected in the Federation Account to give effect to the write-off.
However, the document clarified that NNPC Ltd’s newer obligations for 2025, covering January to October, were not part of the debt cancellation. These liabilities remain outstanding and are currently being monitored, reconciled and recovered through existing mechanisms.
Meanwhile, a separate and long-standing dispute involving alleged under-remittance of $42.37 billion between 2011 and 2017 remains unresolved. NNPC Ltd has consistently disputed the claim, maintaining that all revenues due to the Federation during the period were fully accounted for.
The debt write-off is expected to ease pressure on NNPC Ltd’s balance sheet, while allowing government agencies to focus on addressing current revenue flows and resolving outstanding disputes.
