President Bola Tinubu has approved the cancellation of a substantial portion of debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account, wiping off about $1.42 billion and N5.57 trillion.
The approval was documented by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), titled “Report of October 2025 Revenue Collection Presented at the Federation Account Allocation Committee Meeting Held on 18th November 2025”.
The directive effectively clears the legacy debts accumulated up to December 31, 2024, resolving long-standing disputes between NNPC Ltd and the Federation while leaving current liabilities from 2025 operations under ongoing monitoring.
What the statement is saying
In the section titled “Recovery from NNPC Ltd Outstanding Obligations,” the NUPRC stated that the debts previously reported at the October 2025 FAAC meeting stood at $1,480,610,652.58 and N6,332,884,316,237.13 for PSC, DSDP, RA & MCA Liftings and JV & PSC Royalty Receivables respectively.
However, following the Presidential directive, about $1,421,727,723 and N5,573,895,769,388.45 of these obligations have been officially cancelled. The commission confirmed that all accounting entries reflecting the debt cancellation have been implemented in the Federation Account.
According to the NUPRC, the Presidential approval followed recommendations from the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation, which reviewed royalty and lifting-related liabilities up to the end of 2024.
Despite the cancellation of legacy debts, fresh obligations accumulated in 2025 remain outstanding.
The NUPRC report shows statutory obligations from January to October 2025 totaling $56,808,752.32 and N1,021,550,672,578.87 for PSC & MCA Liftings and JV Royalty Receivables, respectively.
Revenue shortfalls have also been a persistent issue. Monthly royalty collections fell sharply below projections, with November 2025 receipts of N605.26 billion against a target of N1.144 trillion—a deficit of N538.92 billion. Cumulatively, as of November 30, 2025, total approved revenue stood at N13.25 trillion, while actual collections reached N7.60 trillion, representing a gap of N5.65 trillion. For royalties alone, the shortfall was N5.63 trillion.
The reduction in monthly collections is notable compared to October 2025, when N873.10 billion was collected, highlighting ongoing challenges in revenue mobilisation despite the resolution of legacy debts.
What this means
The Presidential cancellation signals a major step toward resolving historical disputes between NNPC Ltd and the Federation, effectively removing nearly 96% of dollar-denominated and 88% of naira-denominated legacy obligations.
While the move provides relief to the Federation Account and clears legacy disputes, the data demonstrates persistent structural challenges in oil and gas revenue collection.
With 2025 obligations still accruing and royalties consistently falling below targets, the need for strengthened fiscal management and robust monitoring of NNPC Ltd’s operations remains critical.
What you should know
NNPC Ltd reported a significant surge in revenue, hitting N5.08 trillion in October 2025, up from N4.27 trillion recorded in September.
The figures are contained in the company’s Monthly Report Summary for October 2025.
According to the report, NNPC Ltd’s profit after tax (PAT) rose sharply to N447 billion in October, compared to N216 billion in September.
Earlier, NNPCL announced that it recorded a Profit After Tax of N5.4 trillion from total revenue of N45.1 trillion for the full year ended 2024.
