President Bola Ahmed Tinubu has approved the clearance of long-standing debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account as of December 31, 2024, effectively removing those legacy obligations from the government’s financial records.
The approval followed a detailed reconciliation of financial records between NNPC Ltd and the Federation. This reconciliation was carried out by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November meeting of the Federation Account Allocation Committee (FAAC).
The details are contained in a document titled “Report of October 2025 Revenue Collection Presented at the Federation Account Allocation Committee Meeting Held on November 18, 2025,” which was obtained by The PUNCH on Sunday.
According to the report, the reconciliation exercise reviewed royalty payments and crude oil lifting-related obligations owed by NNPC Ltd up to December 31, 2024. Based on the outcome, the Presidency directed that most of the outstanding balances previously recorded against the national oil company be cleared.
In the section titled “Recovery from NNPC Ltd Outstanding Obligations,” the NUPRC disclosed that the debts earlier reported at the October 2025 FAAC meeting amounted to $1.48 billion and ₦6.33 trillion. These debts were linked to Production Sharing Contracts (PSC), Direct Sale–Direct Purchase (DSDP), Repayment Agreements (RA), Modified Carry Arrangements (MCA) liftings, as well as Joint Venture (JV) and PSC royalty receivables.
However, following the reconciliation, the Presidency approved the removal of most of these obligations from the Federation Account.
The document stated:
“The commission recently received a Presidential Approval to nil off the outstanding obligations of NNPC Ltd as at 31st December 2024 as submitted by the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation.”
A breakdown provided by the NUPRC showed that out of the total $1.48 billion and ₦6.33 trillion, the amounts cleared were $1.42 billion and ₦5.57 trillion. The commission confirmed that it has already made the necessary accounting entries to reflect the approval.
The report explained that the decision was based on the recommendations of the Stakeholder Alignment Committee, which was set up to reconcile disputed figures and align financial records between NNPC Ltd and the Federation up to the end of 2024.
Importantly, the clearance only applies to debts accumulated up to December 31, 2024. Obligations arising after that date were not affected.
In a separate section titled “NNPC Ltd Outstanding Obligations,” the NUPRC disclosed that statutory liabilities incurred between January and October 2025 are still outstanding. These post-2024 obligations stand at $56.81 million and ₦1.02 trillion, covering PSC and MCA liftings as well as JV royalty receivables.
The commission noted that part of the dollar-denominated debt had already been recovered. It stated that $55 million was received during the review period, leaving an outstanding balance of $1.8 million and ₦1.02 trillion. The recovered amount has been included in the revenue shared by the Federation for the month.
The NUPRC confirmed that the presidential directive clearing the pre-2025 balances has been fully implemented, adding that the appropriate accounting entries have been made.
The development formally closes the chapter on NNPC Ltd’s reconciled debts up to December 2024, while newer obligations will continue to be monitored and recovered under FAAC oversight.
