President Bola Tinubu has approved the write-off of a large portion of the debt owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account, amounting to about $1.42bn and N5.57tn following a reconciliation of records.
The decision 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.
Under the section, “Recovery from NNPC Ltd Outstanding Obligations,” the commission stated that debts previously reported at the October 2025 FAAC meeting stood at $1,480,610,652.58 and N6,332,884,316,237.13, relating to PSC, DSDP, RA and MCA liftings, as well as JV and PSC royalty receivables.
The document revealed that the Presidency has now authorised the removal of most of these balances from the Federation’s records.
It read: “However, the commission recently received Presidential approval to nil off the outstanding obligations of NNPC Ltd as at December 31, 2024, as submitted by the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation.”
Breaking down the figures, the NUPRC explained that out of the original $1.48bn and N6.33tn, debts totalling $1.42bn and N5.57tn were written off, with appropriate accounting entries already effected.
Analysis of the data shows that the approval eliminated about 96 per cent of the dollar-denominated debt and roughly 88 per cent of the naira-denominated liabilities earlier recorded as outstanding.
The write-off followed recommendations by the Stakeholder Alignment Committee, which reviewed NNPC Ltd’s royalty and lifting-related obligations up to December 31, 2024.
However, the report noted that fresh obligations incurred in 2025 remain outstanding. Under a separate heading, “NNPC Ltd Outstanding Obligations,” the commission disclosed that liabilities accrued between January and October 2025 stood at $56.81m and N1.02tn for PSC and MCA liftings, and JV royalty receivables respectively.
It added that $55m was recovered from the dollar-denominated portion during the review period, leaving a balance of $1.8m alongside the full naira liability. The recovered sum was included in the revenue shared by the Federation for the month.
The NUPRC confirmed that the presidential directive had been fully implemented, stating that the necessary accounting entries had been passed.
While the decision resolves long-standing disputes over NNPC Ltd’s legacy debts, the regulator continues to track current liabilities arising from ongoing operations.
The debt cancellation comes amid challenges faced by the commission in meeting its revenue targets. Data in the document showed that against an approved monthly revenue target of N1.204tn for 2025, the NUPRC recorded N660.04bn in actual collections for November, resulting in a shortfall of N544.76bn.
Oil and gas royalties, which make up the bulk of upstream revenue, also fell significantly below projections. While the approved monthly royalty target was N1.144tn, only N605.26bn was collected in November, leaving a deficit of N538.92bn.
As of November 30, 2025, the commission’s total approved cumulative revenue stood at N13.25tn, compared with actual collections of N7.60tn, translating to a gap of N5.65tn. For royalties alone, cumulative approved revenue was N12.59tn, while actual receipts amounted to N6.96tn, leaving a shortfall of N5.63tn.
The report also showed a month-on-month decline in collections, with revenue dropping from N873.10bn in October to N660.04bn in November.
The PUNCH had earlier reported a dispute between NNPC Ltd and Periscope Consulting, the audit firm engaged by the Nigeria Governors’ Forum, over alleged under-remittance of $42.37bn in oil revenue to the Federation Account between 2011 and 2017.
The disagreement, revived by new submissions from both parties, prompted FAAC to order a joint reconciliation exercise to resolve the issue.
According to documents seen by The PUNCH, the FAAC Sub-Committee confirmed that NNPC Ltd rejected Periscope’s audit findings, insisting that all revenues due to the Federation during the period were fully accounted for.
Periscope Consulting, however, maintained that its audit revealed significant gaps in remittances and that the alleged $42.37bn shortfall remained unresolved.
The sub-committee, noting the conflicting claims, directed both parties to hold a joint meeting to reconcile records and close the matter, describing the process as ongoing.
Speaking earlier, Professor Emeritus of Petroleum Economics, Wumi Iledare, said the alleged under-remittance reflects structural weaknesses in Nigeria’s pre–Petroleum Industry Act framework.
He described the controversy as a legacy issue arising from overlapping roles previously played by the former NNPC, stressing that improved transparency, real-time monitoring and regular independent audits under the PIA are necessary to prevent future disputes.
The World Bank has also accused NNPC Ltd of incomplete remittance of oil revenues, warning that the practice undermines fiscal transparency and macroeconomic stability.
According to the bank, although the company was commercialised in 2021, it still controls crude oil sales and foreign exchange inflows, creating persistent gaps between earnings and remittances.
The institution further alleged that NNPC Ltd remitted only about 50 per cent of revenue gains from the removal of petrol subsidy, noting that of the N1.1tn earned in 2024, only N600bn was transferred to the Federation Account.
Despite these concerns, NNPC Ltd Group Chief Executive Officer, Bayo Ojulari, has repeatedly pledged to entrench transparency, accountability and efficiency, assuring Nigerians and investors that the company’s operations and remittances would fully comply with fiscal regulations.
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