President Bola Ahmed Tinubu has approved the cancellation of a substantial portion of the outstanding debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account, effectively writing off legacy obligations amounting to about $1.42 billion and ₦5.57 trillion.
The decision was contained in an official document issued by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November 2025 meeting of the Federation Account Allocation Committee (FAAC).
According to the document, in a statement issued on Monday by the State House, Abuja, the approval covers long-standing financial obligations accumulated by NNPC Ltd before the end of 2024 and represents a major step in reconciling historic financial exposures between the national oil company and the Federal Government.
The write-off follows recommendations by the Stakeholder Alignment Committee, which was established to harmonise and reconcile indebtedness between NNPC Ltd and the Federation. The committee’s review focused on resolving legacy liabilities that had persisted across several years and accounting periods.
Details from the NUPRC document indicate that the debt cancellation applies to obligations incurred up to 31 December 2024, including those arising from Production Sharing Contracts (PSCs), domestic crude supply obligations, repayment agreements, modified carry arrangements, as well as joint venture and PSC royalty receivables.
The document further confirmed that corresponding accounting adjustments have already been effected in the Federation Account, reflecting the approved cancellations and aligning government records with the reconciled figures.
However, the write-off does not extend to more recent obligations. Debts accumulated between January and October 2025 remain outstanding and are being actively monitored, tracked, and recovered in line with existing financial and regulatory frameworks.
In addition, the document highlighted that a long-running dispute between NNPC Ltd and the Federation 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 due to the Federation during the period were fully accounted for and properly remitted.
The approval of the debt write-off is expected to provide greater clarity in government oil revenue accounting, ease historical financial bottlenecks, and support ongoing reforms aimed at strengthening transparency and efficiency within Nigeria’s oil and gas sector.
