Mkpoikana Udoma
Port Harcourt — President Bola Tinubu has approved the cancellation of about $1.42 billion in legacy debts owed by the Nigerian National Petroleum Company Limited, NNPC Ltd, to the Federation Account, easing a long-standing financial burden on government revenues.
The decision was disclosed in a document by the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, and presented at the November 2025 Federation Account Allocation Committee, FAAC, meeting, following recommendations by the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation.
According to the document, the debt write-off covers legacy obligations up to December 31, 2024, including liabilities arising from Production Sharing Contracts, PSC, Domestic Supply Obligations, repayment agreements, modified carry arrangements, and joint venture/PSC royalty receivables.
The NUPRC noted that the approval was based on an extensive reconciliation process, adding that “corresponding accounting adjustments have already been effected in the Federation Account.”
While the clearance significantly reduces NNPC Ltd’s historical debt exposure, the document clarified that newer obligations incurred between January and October 2025 remain outstanding and are currently being tracked and recovered through established mechanisms.
However, a separate and much larger dispute remains unresolved. Claims of $42.37 billion in alleged under-remittances between 2011 and 2017 are still under contention, with NNPC Ltd rejecting the allegations, insisting that “all revenues due to the Federation were properly accounted for.”
The latest decision is expected to improve clarity in Federation Account reconciliations and strengthen fiscal planning, even as government agencies continue efforts to resolve outstanding disputes and enforce current remittance obligations.
