Presidential directive clears long-standing oil revenue balances as fresh 2025 liabilities and revenue shortfalls persist
President Bola Ahmed Tinubu has approved the cancellation of a significant portion of outstanding debts owed by Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account, resulting in the removal of approximately $1.42 billion and ₦5.57 trillion from government records after a reconciliation exercise.
The approval is 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).
According to the report titled “Report of October 2025 Revenue Collection Presented at the Federation Account Allocation Committee Meeting Held on 18th November 2025”, the debts had earlier been reported at the October 2025 FAAC meeting as $1.48 billion and ₦6.33 trillion, covering obligations related to Production Sharing Contracts (PSC), Direct Sale Direct Purchase (DSDP), Royalty Adjustment (RA), Modified Carry Arrangement (MCA) liftings, as well as joint venture and PSC royalty receivables.
The commission disclosed that the Presidency approved the removal of most of the balances following recommendations by the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation, which reviewed outstanding liabilities up to December 31, 2024.
“As a result of the presidential approval, affected outstanding obligations amounting to $1.42 billion and ₦5.57 trillion have been nilled off, and the appropriate accounting entries have been passed,” the document stated.
An analysis of the figures shows that the directive eliminated about 96 per cent of the dollar-denominated debt and roughly 88 per cent of the naira obligations previously recorded against NNPC Ltd.
Despite the clearance of legacy balances, the NUPRC noted that new statutory obligations incurred in 2025 remain outstanding. These liabilities, covering the period from January to October 2025, stood at $56.81 million and ₦1.02 trillion for PSC and MCA liftings, as well as joint venture royalty receivables.
The commission confirmed that $55 million was recovered from the dollar component during the review period, leaving an outstanding balance of $1.8 million, while the naira-denominated liabilities remain unchanged. The recovered amount was included in the revenue shared by the Federation for the month.
While the debt cancellation resolves long-standing disputes over NNPC’s historical obligations, the document revealed that the regulator is struggling to meet its revenue targets.
For November 2025, the NUPRC recorded ₦660.04 billion in actual revenue against an approved monthly target of ₦1.20 trillion, resulting in a shortfall of ₦544.76 billion. Oil and gas royalties, which form the bulk of upstream revenues, accounted for most of the deficit, with actual collections of ₦605.26 billion compared to a projected ₦1.14 trillion.
Cumulatively, as of November 30, 2025, approved revenue stood at ₦13.25 trillion, while actual collections amounted to ₦7.60 trillion, leaving a gap of ₦5.65 trillion. Royalty collections alone recorded a cumulative shortfall of ₦5.63 trillion.
The report also showed a decline in revenue performance month-on-month, with collections falling from ₦873.10 billion in October to ₦660.04 billion in November.
Meanwhile, disputes over historical oil revenue remittances remain unresolved. The document referenced an ongoing disagreement between NNPC Ltd and Periscope Consulting, the audit firm engaged by the Nigeria Governors’ Forum to investigate an alleged $42.37 billion under-remittance to the Federation Account between 2011 and 2017.
NNPC Ltd has rejected the audit findings, insisting that all revenues due to the Federation were fully remitted during the period. However, Periscope Consulting maintains that substantial gaps remain, prompting FAAC to mandate a joint reconciliation process, which is still ongoing.
The World Bank has also raised concerns over NNPC Ltd’s remittance practices, warning that incomplete transfers to the Federation Account undermine fiscal transparency and economic stability. The bank noted that despite subsidy removal, the company has been remitting only about 50 per cent of revenue gains, using the balance to offset historical arrears.
Since assuming office, NNPC Ltd Group Chief Executive Officer, Bayo Ojulari, has repeatedly pledged to strengthen transparency, accountability and full compliance with fiscal rules, assuring Nigerians and investors that the company’s operations will meet global governance standards.
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