By Muhammad Mamman
President Bola Tinubu has approved a sweeping cancellation of the Nigerian National Petroleum Company Limited’s (NNPC Ltd) long-standing debts to the Federation Account, clearing approximately $1.42 billion and N5.57 trillion in legacy obligations.
The approval was disclosed in a document prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November 2025 meeting of the Federation Account Allocation Committee (FAAC). The move follows extensive reconciliation efforts and recommendations by the Stakeholder Alignment Committee on NNPC’s indebtedness to the Federation.
According to the document, the write-off covers liabilities accumulated up to 31 December 2024. These include debts arising from Production Sharing Contracts (PSC), domestic supply commitments, repayment agreements, modified carry arrangements, and outstanding joint venture and PSC royalty receivables.
The NUPRC confirmed that the corresponding accounting adjustments reflecting the debt cancellation have already been effected in the Federation’s books.
However, while the legacy debts have now been erased, the Commission noted that more recent obligations for 2025—spanning January to October—remain outstanding and are being closely monitored for recovery.
Meanwhile, an unresolved dispute over an alleged $42.37 billion under-remittance by NNPC Ltd between 2011 and 2017 still lingers. The national oil company has consistently dismissed the claim, maintaining that all revenues within that period were duly accounted for.
The latest write-off marks one of the most significant fiscal resets in the evolving financial framework between NNPC Ltd and the Federation since the company’s transition to a fully commercial entity.
