President Bola Ahmed Tinubu has approved the cancellation of about $1.42 billion and ₦5.57 trillion in legacy debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account.
The approval is contained in a document prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November 2025 Federation Account Allocation Committee (FAAC) meeting, following recommendations by the Stakeholder Alignment Committee on the reconciliation of NNPC’s indebtedness to the Federation.
The debt write-off covers legacy obligations accumulated up to December 31, 2024, including liabilities arising from production sharing contracts, domestic crude supply obligations, repayment agreements, modified carry arrangements, and joint venture and PSC royalty receivables. Corresponding accounting adjustments have already been effected in the Federation Account, formalizing the implementation of the decision.
However, the approval does not extend to newer obligations incurred in 2025, with debts between January and October still outstanding and currently being tracked for recovery.
Meanwhile, a separate and long-running dispute over the alleged under-remittance of $42.37 billion between 2011 and 2017 remains unresolved.
NNPC Ltd has continued to reject the claims, insisting that all revenues due to the Federation during the period were properly accounted for.
The debt cancellation is expected to ease longstanding reconciliation challenges within FAAC and reset NNPC Ltd’s financial position as it operates as a commercial entity under the Petroleum Industry Act, though the company’s revenue remittance practices remain under close scrutiny
