President Bola Tinubu has approved the cancellation of a substantial portion of the debts owed by the Nigerian National Petroleum Company Limited to the Federation Account, wiping off about $1.42bn and N5.57tn after a reconciliation of records between both parties.
This is contained in a document prepared by the Nigerian Upstream Petroleum Regulatory Commission and presented at the November meeting of the Federation Account Allocation Committee.
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 newsmen.
In the section headed “Recovery from NNPC Ltd Outstanding Obligations,” the commission said the debts earlier reported at the October 2025 FAAC meeting stood at “$1,480,610,652.58 and N6,332,884,316,237.13 for PSC, DSDP, RA & MCA Liftings and JV & PSC Royalty Receivables respectively.”
It disclosed that the Presidency had now approved that most of those balances be removed from the Federation’s books.
The document stated, “However, 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 of the affected balances, the NUPRC added, “Consequently, out of $1,480,610,652.58 and N6,332,884,316,237.13, the affected outstanding obligations that have been nil off are $1,421,727,723.00 N5,573,895,769,388.45. The commission has passed the appropriate accounting entries as approved.”
Despite the cancellation of the legacy balances, fresh debts built up in 2025 remain. In a separate section titled “NNPC Ltd Outstanding Obligations,” the regulator disclosed that statutory obligations arising between January and October 2025 still stood at “$56,808,752.32 and N1,021,550,672,578.87 for PSC & MCA Liftings and JV Royalty Receivables respectively.”
The NUPRC confirmed that it had already implemented the directive in the Federation Account, noting that “the Commission has passed the appropriate accounting entries as approved.”
The approval effectively resolves long-running disputes over NNPC’s legacy indebtedness to the Federation, while current liabilities from ongoing operations continue to be tracked for future recovery. The debt cancellation however comes at a time when the commission is struggling to meet its revenue projections for the year.
