PRESIDENT Bola Ahmed Tinubu has approved the cancellation of a substantial portion of debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account, wiping off approximately $1.42 billion and ₦5.57 trillion following a comprehensive reconciliation of records between both parties.
The development was 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 News Point Nigeria and provides detailed insight into the long-standing financial reconciliation between the national oil company and the Federation.
According to the document, the debts earlier reported at the October 2025 FAAC meeting stood at $1,480,610,652.58 and ₦6,332,884,316,237.13, covering obligations related to Production Sharing Contracts (PSC), Direct Sale–Direct Purchase (DSDP), Repayment Agreements (RA), Modified Carry Arrangements (MCA), Joint Venture (JV) and PSC royalty receivables.
However, the NUPRC disclosed that the Presidency had approved the removal of most of these balances from the Federation’s books after a reconciliation exercise conducted by the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation.
The document 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.”
Providing a breakdown, the commission explained that $1,421,727,723.00 and ₦5,573,895,769,388.45 were written off, representing about 96 per cent of the dollar-denominated debt and 88 per cent of the naira obligations previously recorded.
It added that the necessary accounting entries had already been effected in line with the presidential directive.
Despite the clearance of these legacy balances, the report revealed that fresh debts accumulated in 2025 remain outstanding. Statutory obligations incurred between January and October 2025 were put at $56,808,752.32 and ₦1,021,550,672,578.87, arising from PSC and MCA liftings, as well as JV royalty receivables.
The NUPRC noted that part of the dollar-denominated obligation had been recovered during the review period, with $55,003,997.00 received, leaving a balance of $1,804,755.32, while the naira component remained unpaid.
According to the commission, the recovered amount had already been included in the total revenue shared by the Federation for the month.
The debt cancellation effectively resolves long-running disputes over NNPC’s legacy indebtedness, though liabilities from ongoing operations continue to be monitored for future recovery.
However, the development comes at a time when the NUPRC is grappling with significant revenue shortfalls. Data from the same FAAC document showed that against an approved monthly revenue target of ₦1.204 trillion, the commission recorded ₦660.04 billion in actual collections for November 2025, resulting in a ₦544.76 billion shortfall.
Oil and gas royalty payments, which form the backbone of upstream revenue, also fell sharply below expectations. While the approved monthly royalty projection stood at ₦1.144 trillion, only ₦605.26 billion was collected in November, leaving a deficit of ₦538.92 billion.
Cumulatively, as of November 30, 2025, the commission’s approved revenue target stood at ₦13.25 trillion, while actual collections amounted to ₦7.60 trillion, creating a revenue gap of ₦5.65 trillion. Royalty collections alone recorded a cumulative shortfall of ₦5.63 trillion.
The document also showed a month-on-month decline in revenue, with collections dropping from ₦873.10 billion in October to ₦660.04 billion in November.
Meanwhile, the debt reconciliation occurs against the backdrop of a renewed dispute between NNPC Ltd and Periscope Consulting, the audit firm engaged by the Nigeria Governors’ Forum to probe an alleged $42.37 billion under-remittance to the Federation Account between 2011 and 2017.
FAAC documents revealed that NNPC has formally rejected the audit findings, insisting that all revenues for the period were fully accounted for. However, Periscope Consulting has maintained that significant gaps remain unresolved.
The FAAC sub-committee subsequently directed both parties to conduct a joint reconciliation session, noting that the matter remains a work in progress.
Commenting earlier, Professor Emeritus of Petroleum Economics, Wumi Iledare, described the alleged under-remittance as a legacy issue rooted in Nigeria’s pre–Petroleum Industry Act framework, which allowed overlapping roles and weak reconciliation mechanisms.
The World Bank has also repeatedly raised concerns over NNPC’s remittance practices, warning that incomplete transfers undermine fiscal transparency and macroeconomic stability. The bank disclosed that despite subsidy removal, NNPC has been remitting only about 50 per cent of revenue gains, using the remainder to offset past arrears.
Since assuming office, NNPC Ltd Group Chief Executive Officer, Bayo Ojulari, has pledged to deepen transparency, accountability, and efficiency, assuring Nigerians that the company’s books would remain open and fully compliant with fiscal regulations.