President Bola Tinubu has granted approval for the cancellation of significant legacy debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account, effectively writing off approximately $1.42 billion and ₦5.57 trillion.
The decision, based on recommendations from the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation, was detailed in a presentation by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) during the November 2025 Federation Account Allocation Committee (FAAC) meeting.
These legacy obligations, accumulated up to December 31, 2024, stem from various arrangements including Production Sharing Contracts (PSC), Domestic Supply obligations, repayment agreements, modified carry arrangements, and joint venture/PSC royalty receivables.
The approval has led to corresponding accounting adjustments in the Federation Account, resolving longstanding disputes over these historical liabilities.
Prior to the write-off, the outstanding amounts reported at the October 2025 FAAC meeting totaled around $1.48 billion and ₦6.33 trillion.
The cancellation covers the bulk of these, about 96% of the dollar-denominated debt and 88% of the naira portion providing a clean slate for pre-2025 obligations.
However, newer debts accrued in 2025 (from January to October) remain on the books and are under active monitoring and recovery efforts by relevant authorities.
Separately, a longstanding dispute involving alleged under-remittances of $42.37 billion dating back to 2011–2017 continues unresolved.
NNPC Ltd has consistently rejected these claims, maintaining that all revenues during that period were properly accounted for and remitted.
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