AWC Energy Desk
President Bola Ahmed Tinubu has approved the cancellation of a significant portion of outstanding debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account, effectively writing off about $1.42 billion and ₦5.57 trillion in legacy obligations.
The approval, disclosed in a document by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), was presented at the November 2025 meeting of the Federation Account Allocation Committee (FAAC). The decision followed recommendations by the Stakeholder Alignment Committee, set up to reconcile longstanding indebtedness between NNPC Ltd and the Federation.
The debt write-off covers legacy obligations incurred 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.
According to the document, the necessary accounting adjustments have already been effected in the Federation Account, bringing clarity to historical balances and improving fiscal transparency between the national oil company and the Federation.
However, the write-off does not extend to new obligations incurred between January and October 2025, which remain outstanding. These debts are reportedly being actively tracked and recovered through appropriate mechanisms.
Meanwhile, a separate and long-running dispute over an alleged $42.37 billion under-remittance between 2011 and 2017 remains unresolved. NNPC Ltd has consistently rejected the claim, maintaining that all revenues during the period were fully and properly accounted for.
The latest approval is seen as part of broader efforts by the Tinubu administration to reset fiscal records, enhance accountability in the oil and gas sector, and strengthen revenue management for the Federation.
