iDeemlawfulThe Federal Government under President Bola Ahmed Tinubu has approved the cancellation of a substantial portion of the Nigerian National Petroleum Company Limited’s (NNPC Ltd) indebtedness to the Federation Account, following a reconciliation of records between both parties.
The approval clears about $1.42bn (₦2.059trn) alongside an additional ₦5.57trn, representing a major adjustment to NNPC’s outstanding financial liabilities to the federal treasury.
According to PUNCH, the decision was outlined in a document prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November 2025 Federation Account Allocation Committee (FAAC) meeting.
The move followed recommendations by the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation.
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The approved write-off applies to legacy obligations up to December 31, 2024. These include Production Sharing Contracts (PSC), Domestic Supply commitments, repayment agreements, modified carry arrangements, as well as joint venture and PSC royalty receivables.
The decision was based on recommendations from the Stakeholder Alignment Committee and reconciliation efforts conducted by the NUPRC, with the necessary accounting adjustments already reflected in the Federation Account.
While the bulk of historical liabilities has now been addressed, newer obligations incurred between January and October 2025 remain outstanding and are currently being monitored and recovered.
Separately, a long-standing dispute over alleged under-remittance of $42.37bn between 2011 and 2017 is yet to be resolved, as NNPC Ltd continues to dispute the claims, maintaining that all revenues were fully accounted for.