In a major fiscal decision, President Bola Tinubu has sanctioned the cancellation of $1.42bn and ₦5.57tn in outstanding legacy debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account after a review of the company’s historical liabilities.
The approval followed recommendations by the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation, which examined the company’s royalty- and lifting-related obligations up to December 31, 2024.
Reports indicate that NNPC Ltd’s previously reported debts amounted to approximately $1.48bn and ₦6.33tn. Of this sum, about $1.42bn and ₦5.57tn were written off, representing roughly 96 per cent of the dollar-denominated liabilities and 88 per cent of the naira-denominated debts.
It was further gathered that while the legacy debts have been wiped off, fresh statutory obligations arising in 2025 remain outstanding, with collections on those liabilities continuing.
Details of the debt cancellation were contained in a document prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November meeting of the Federation Account Allocation Committee (FAAC).
The report, titled “Report of October 2025 Revenue Collection Presented at the Federation Account Allocation Committee Meeting Held on 18th November 2025,” noted that debts earlier reported at the October 2025 FAAC meeting stood at $1,480,610,652.58 and ₦6,332,884,316,237.13, covering PSC, DSDP, RA and MCA liftings, as well as JV and PSC royalty receivables.
In the section titled “Recovery from NNPC Ltd Outstanding Obligations”, the NUPRC explained that the Presidency had approved the removal of most of the balances 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.
“Consequently, out of $1,480,610,652.58 and ₦6,332,884,316,237.13, the affected outstanding obligations that have been nilled off are $1,421,727,723.00 and ₦5,573,895,769,388.45. The commission has passed the appropriate accounting entries as approved”.
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