Reconciliation approved by President Tinubu wipes most dollar and naira obligations owed by the nation’s oil firm to federation accounts after an audit review.
Nigeria’s federal government has approved the cancellation of most longstanding debts owed by the Nigerian National Petroleum Company Ltd. (NNPCL) to the federation account, writing off obligations totaling about $1.42 billion and ₦5.57 trillion, according to an official regulatory document.
The decision followed a reconciliation exercise endorsed by President Bola Tinubu and effectively clears legacy balances linked to crude oil liftings, production-sharing contracts, and joint venture royalties accumulated through the end of 2024.
Details of the move were outlined in a report prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November meeting of the Federation Account Allocation Committee (FAAC), the body that oversees the distribution of oil and non-oil revenues among federal, state, and local governments.
Before the adjustment, NNPCL’s outstanding obligations reported to FAAC stood at roughly $1.48 billion and ₦6.33 trillion. Following the reconciliation, the regulator removed about 96% of the dollar-denominated debt and nearly 88% of the naira liabilities from the federation’s books.
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In the document, the NUPRC said the write-off was based on submissions by a stakeholder committee established to align and reconcile claims between the national oil company and the federal government. The commission said it had received formal presidential approval to “nil off” the validated outstanding balances as of December 31, 2024, and had already passed the necessary accounting entries.
The relief, however, does not apply to more recent obligations. Statutory liabilities incurred in 2025 remain outstanding, with balances of about $56.8 million and ₦1.02 trillion recorded for the period from January to October 2025. These are tied mainly to lifting-related charges and joint venture royalty payments.
Part of the dollar-denominated amount was recovered during the period under review. The regulator reported receiving just over $55 million, reducing the remaining dollar balance to about $1.8 million. The recovered funds were included in revenues shared by the federation for the month.
The debt adjustment comes at a time when Nigeria’s upstream oil revenues continue to fall short of official expectations. Data in the same report show that the NUPRC missed its approved revenue target for November 2025, by more than 540 billion naira, largely due to weaker-than-anticipated royalty receipts from oil and gas production. Collections for the month also declined compared with October 2025.
The development highlights ongoing challenges in Nigeria’s oil-dependent public finances, even as authorities seek to clean up legacy accounts and improve transparency in revenue management.