President Bola Tinubu has authorised the removal of a large portion of the Nigerian National Petroleum Company Limited’s (NNPC Ltd) outstanding debts to the Federation Account, following a reconciliation exercise between the company and the Federal Government. The approval cleared about $1.42 billion and ₦5.57 trillion from the national accounts.
Details of the decision are 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 “October 2025 Revenue Collection Report Presented at the FAAC Meeting Held on 18 November 2025,” was obtained by The PUNCH.
According to the document, liabilities previously reported at the October 2025 FAAC meeting amounted to $1.48 billion and ₦6.33 trillion, covering obligations from production sharing contracts, direct sale-direct purchase arrangements, royalty arrears, crude liftings and joint venture receivables.
The NUPRC disclosed that the Presidency has now approved the cancellation of most of those legacy balances. It stated that the approval followed recommendations from the Stakeholder Alignment Committee set up to reconcile debts between NNPC Ltd and the Federation as of December 31, 2024.
A breakdown in the report shows that $1.421 billion and ₦5.57 trillion of the total liabilities 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 all necessary accounting entries had already been effected in line with the presidential directive.
While the approval clears long-standing legacy debts, the report noted that new obligations accumulated in 2025 remain outstanding. Statutory liabilities recorded between January and October 2025 stood at $56.81 million and ₦1.02 trillion, linked to crude liftings and joint venture royalties.
The regulator revealed that $55 million was recovered from the dollar component during the review period, leaving a balance of $1.8 million, while the naira liability remains unchanged. The recovered amount has already been included in revenue shared by the Federation for the month.
The document noted that the debt cancellation resolves prolonged disputes over NNPC Ltd’s historical indebtedness, even as current obligations continue to be monitored for recovery.
However, the development comes amid revenue shortfalls faced by the NUPRC. Data in the report showed that against an approved monthly revenue target of ₦1.204 trillion for November 2025, the commission generated ₦660.04 billion, resulting in a shortfall of ₦544.76 billion.
Royalty collections from oil and gas production fell significantly below projections. While the monthly royalty target was ₦1.144 trillion, only ₦605.26 billion was realised, leaving a deficit of ₦538.92 billion. Cumulatively, total approved revenue for 2025 stood at ₦13.25 trillion, but actual collections as of November were ₦7.6 trillion, creating a gap of ₦5.65 trillion.
The report also showed a decline in revenue performance compared to October, when ₦873.10 billion was collected.
Meanwhile, a separate dispute involving NNPC Ltd and Periscope Consulting—an audit firm engaged by the Nigeria Governors’ Forum—remains unresolved. The audit alleged an under-remittance of $42.37 billion to the Federation Account between 2011 and 2017.
NNPC Ltd has rejected the audit findings, insisting that all revenues due to the Federation during the period were fully remitted. Periscope Consulting, however, maintains that significant discrepancies remain.
Due to the conflicting claims, the FAAC Sub-Committee has directed both parties to hold a joint reconciliation meeting to harmonise records and bring the matter to a close. The reconciliation process, according to the committee, is still ongoing.
Commenting on the controversy, Professor Emeritus of Petroleum Economics, Wumi Iledare, described the alleged under-remittance as a legacy issue rooted in the pre–Petroleum Industry Act framework, which allowed overlapping roles and weak revenue tracking. He stressed that full implementation of the PIA, continuous audits and real-time monitoring are necessary to prevent similar disputes.
The World Bank has also previously criticised NNPC Ltd over revenue remittances, warning that gaps in oil revenue transfers undermine fiscal transparency. The bank noted that despite the company’s commercialisation in 2021, it still controls crude sales and foreign exchange inflows, contributing to persistent remittance concerns.
According to the World Bank, NNPC Ltd remitted only about half of the revenue gains from fuel subsidy removal, leaving significant amounts unaccounted for.
NNPC Ltd’s Group Chief Executive Officer, Bayo Ojulari, has repeatedly pledged to strengthen transparency and accountability, assuring Nigerians and investors that the company’s financial dealings with the Federation would comply fully with fiscal regulations.
