President Bola Ahmed Tinubu has approved the cancellation of a significant portion of the Nigerian National Petroleum Company Limited’s (NNPC Ltd) outstanding debts owed to the Federation Account, effectively wiping out about $1.42 billion and N5.57 trillion in legacy obligations.
The approval was contained in a document by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November 2025 Federation Account Allocation Committee (FAAC) meeting.
The debt relief followed the recommendations of the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation, alongside extensive reconciliation work carried out by the NUPRC.
According to the document, the write-off covers legacy obligations accumulated up to December 31, 2024, including liabilities arising from Production Sharing Contracts (PSCs), domestic crude supply obligations, repayment agreements, modified carry arrangements, as well as joint venture and PSC royalty receivables.
Relevant accounting adjustments have already been effected in the Federation Account.
However, the document noted that new obligations incurred by NNPC Ltd between January and October 2025 remain outstanding, adding that these debts are currently being tracked and are subject to ongoing recovery efforts.
Meanwhile, a separate and long-standing dispute involving alleged under-remittance of $42.37 billion between 2011 and 2017 remains unresolved.
NNPC Ltd has continued to reject the claims, maintaining that all revenues due to the Federation were fully remitted and properly accounted for.
