President Bola Tinubu has authorised the cancellation of a large share of the debts owed by the Nigerian National Petroleum Company Limited to the Federation Account, clearing approximately $1.42bn and N5.57tn following a reconciliation of the financial records between both sides.
This was revealed in a document compiled by the Nigerian Upstream Petroleum Regulatory Commission and presented during the November session of the Federation Account Allocation Committee.
The document, which was titled “Report of October 2025 Revenue Collection Presented at the Federation Account Allocation Committee Meeting Held on 18th November 2025,” was obtained on Sunday.
In the section headed “Recovery from NNPC Ltd Outstanding Obligations,” the commission explained that the debts earlier stated at the October 2025 FAAC meeting amounted to “$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 revealed that the Presidency has now granted approval for most of those balances to be removed from the Federation’s financial statements.
The document added, “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 details of the balances affected, the NUPRC further stated, “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.”
An assessment of the figures indicates that the presidential approval eliminated around 96 per cent of the dollar-based debt and roughly 88 per cent of the naira-based liabilities that had previously been reported as outstanding.
The document shows that the approval was based on the recommendations of the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation, which reviewed the company’s royalty and lifting-related liabilities up to 31 December 2024.
Despite the removal of the old debt balances, new obligations accumulated in 2025 remain in place. In another section titled “NNPC Ltd Outstanding Obligations,” the regulator stated that statutory liabilities 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 commission added that a portion of the dollar component was recovered within the period under review, stating: “However, the commission received $55,003,997.00 in the month under review from the outstanding, leaving a balance of $1,804,755.32 and N1,021,550,672,578.87. The amount of $55,003,997.00 received is part of the total collection reported above for sharing by the Federation this month.”
The NUPRC confirmed that it has already implemented the directive in the Federation Account, noting that “the Commission has passed the appropriate accounting entries as approved.”
The approval has effectively settled long-standing disputes relating to NNPC’s historic indebtedness to the Federation, while current liabilities from ongoing operations continue to be monitored for later recovery.
However, the cancellation of the debt comes at a period when the commission is battling to meet its revenue targets for the year. Data contained in the NUPRC document showed that against an approved monthly revenue target of N1.204tn for 2025, the commission recorded N660.04bn as actual revenue for November 2025, resulting in a shortfall of N544.76bn for that month.
Royalty receipts on oil and gas, which form the largest share of upstream income, dropped significantly below expectations. The approved monthly royalty projection was N1.144tn, compared to N605.26bn actually generated in November, reflecting a deficit of N538.92bn.
In total, as at 30 November 2025, the NUPRC’s overall approved revenue stood at N13.25tn, while actual cumulative collections amounted to N7.60tn, indicating a revenue shortfall of N5.65tn. For royalties alone, the cumulative approved figure was N12.59tn, compared with N6.96tn actually realised, leaving a gap of N5.63tn.
The document also revealed a decline in revenue realisation when compared with the previous month. While N873.10bn was collected in October 2025, the amount dropped to N660.04bn in November.
There had earlier been a dispute between the Nigerian National Petroleum Company Limited and Periscope Consulting, the audit firm commissioned by the Nigeria Governors’ Forum to review an alleged under-remittance of oil revenue amounting to $42.37bn (about N12.91tn) to the Federation Account between 2011 and 2017.
The renewed disagreement, triggered by fresh submissions from both parties, led the Federation Account Allocation Committee to order a joint reconciliation exercise to establish the accurate state of remittances and resolve the prolonged disagreement.
According to a document reviewed by the FAAC Sub-Committee, it was confirmed that NNPC had officially disputed the audit findings, maintaining that no outstanding revenue is owed to the Federation Account for the period assessed.
The national oil company insisted that all crude oil proceeds and associated earnings had been fully recorded, rejecting Periscope’s position that there were major shortfalls in remittances.
However, Periscope Consulting strongly disagreed with NNPC Limited’s explanation, insisting that its audit identified significant gaps in remittances and that the alleged $42.37bn shortfall remains unresolved.
The report stated, “NNPC Limited submitted their response regarding $42,373,896,555.00 under remittance to the Federation Account as contained in the report of Periscope Consulting. Recall that Periscope Consulting was the Consultant engaged by the Governors’ Forum to examine NNPC Limited under remittance to the Federation Account.
“NNPC Limited responded that all revenues due to the Federation have been properly accounted for and no outstanding amounts for the period under review.”
This disagreement has resulted in a stalemate, with the consultants maintaining that the explanations provided by the oil company do not align with the audited financial records.
The FAAC sub-committee, after noting the contradicting positions, directed that NNPC Ltd and Periscope Consulting must hold a joint session to harmonise their records and “close out” the outstanding issues. It further stated that the reconciliation exercise is still ongoing.
“Responding, Periscope Consulting disagreed with NNPC Ltd’s position; hence, the Sub-Committee directed that there should be a joint meeting with the two parties to close out on the issue. This assignment is a work in progress,” it added.
Speaking earlier, a renowned Prof Emeritus of Petroleum Economics, Wumi Iledare, explained that the alleged $42.37bn under-remittance recorded between 2011 and 2017 reflects long-standing weaknesses in Nigeria’s pre–Petroleum Industry Act operating structure.
He stated that the former Nigerian National Petroleum Corporation functioned with overlapping responsibilities that made revenue verification difficult and frequently contentious. Iledare described the situation as a “legacy problem,” emphasising that such discrepancies can only be prevented through disciplined enforcement of the PIA, real-time monitoring, and continuous independent auditing.
The World Bank had earlier accused NNPCL of failing to fully remit oil revenues to the Federation Account, thereby weakening fiscal transparency and macroeconomic stability.
The institution observed that although the company was commercialised in 2021 to operate as a profit-oriented entity, it still maintains monopolistic control over crude oil sales and foreign exchange inflows, resulting in recurring gaps between declared earnings and actual remittances.
“NNPC Ltd has remained a key source of revenue leakages,” the World Bank stated, urging the government to “strengthen oversight, ensure full disclosure of oil proceeds, and improve transparency in federation revenue management.”
The institution explained that the state-owned company has only been remitting 50 per cent of revenue gains from the withdrawal of the Premium Motor Spirit subsidy into the Federation Account.
It stated that out of the N1.1tn revenue generated from crude sales and other income in 2024, the NNPC Ltd remitted only N600bn, leaving a deficit of N500bn unremitted.
“Despite the subsidy being fully removed in October 2024, NNPC Ltd started transferring the revenue gains to the Federation only in January 2025. Since then, it has been remitting only 50 per cent of these gains, using the rest to offset past arrears,” the World Bank stated.
Since assuming office, the NNPC Ltd Group Chief Executive Officer, Bayo Ojulari, has consistently promised to uphold transparency, efficiency, and accountability across the company’s operations.
He has repeatedly reassured Nigerians and the global investment community that the company’s financial records will be transparent and that its dealings with the Federation Account will fully comply with established fiscal regulations.
