FG Clears $1.42bn, N5.57tn NNPC Obligations
By Wellington Jopelo
The Federal Government has approved the removal of a large portion of the Nigerian National Petroleum Company Limited’s outstanding debts to the Federation Account, effectively clearing legacy obligations amounting to about $1.42bn and ₦5.57tn.
The decision followed a reconciliation exercise between NNPC Ltd and relevant government agencies and was contained in a report presented at the November meeting of the Federation Account Allocation Committee (FAAC). The document, prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), confirmed that the Presidency authorised the write-off of most of the oil company’s long-standing liabilities as of December 31, 2024.
Before the approval, NNPC’s obligations stood at over $1.48bn and ₦6.33tn, covering crude oil liftings, royalty payments, and other statutory dues. However, the reconciliation process led to the cancellation of approximately 96 per cent of the dollar-denominated debt and about 88 per cent of the naira component, with the regulator already making the necessary accounting adjustments.
The NUPRC explained that the clearance was based on recommendations from a Stakeholder Alignment Committee set up to resolve disputes over historical indebtedness between NNPC Ltd and the Federation. The move is expected to bring closure to years of disagreements over legacy balances inherited from previous reporting periods.
Despite the relief granted on past obligations, the regulator noted that fresh liabilities accumulated in 2025 remain outstanding. Statutory dues recorded between January and October 2025 were put at over $56.8m and ₦1.02tn. While part of the dollar component has been recovered, a balance is still being tracked for future remittance.
The report also revealed that upstream revenue performance has continued to lag behind projections. Actual collections for November 2025 fell significantly short of approved targets, driven largely by lower-than-expected oil and gas royalty payments. Cumulative figures for the year showed a wide gap between expected revenues and what was eventually realised.
Meanwhile, the debt write-off comes against the backdrop of unresolved disagreements between NNPC Ltd and Periscope Consulting, the firm engaged by the Nigeria Governors’ Forum to audit alleged under-remittances of oil revenue between 2011 and 2017. While NNPC maintains that all revenues due to the Federation were properly accounted for, the consultants insist substantial shortfalls remain.
FAAC has since directed both parties to harmonise their records through a joint reconciliation process, which is still ongoing.
Analysts say the clearance of NNPC’s legacy debts highlights persistent structural weaknesses in Nigeria’s oil revenue management framework prior to the Petroleum Industry Act, while underscoring the need for stricter oversight, real-time monitoring, and transparency to prevent similar disputes in the future.