President Bola Tinubu has authorised the cancellation of a substantial portion of debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account, eliminating approximately $1.42 billion and N5.57 trillion.
The approval was documented by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in a report titled “Report of October 2025 Revenue Collection Presented at the Federation Account Allocation Committee Meeting Held on 18th November 2025.” The directive clears legacy debts accumulated up to December 31, 2024, resolving longstanding disputes between NNPC Ltd and the Federation, while leaving current liabilities from 2025 operations under ongoing monitoring.
In the section “Recovery from NNPC Ltd Outstanding Obligations,” the NUPRC noted that debts previously reported at the October 2025 FAAC meeting amounted to $1,480,610,652.58 and N6,332,884,316,237.13 for PSC, DSDP, RA & MCA Liftings and JV & PSC Royalty Receivables, respectively. Following the Presidential directive, about $1,421,727,723 and N5,573,895,769,388.45 of these obligations were officially cancelled. The commission confirmed that all accounting entries reflecting the debt cancellation have been implemented in the Federation Account.
The NUPRC stated that 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, new obligations from 2025 remain outstanding.
The 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 remained significant, with November 2025 royalty receipts of N605.26 billion falling below a target of N1.144 trillion—a deficit of N538.92 billion. As of November 30, 2025, total approved revenue stood at N13.25 trillion, while actual collections reached N7.60 trillion, a gap of N5.65 trillion. Royalties alone fell short by N5.63 trillion. The reduction in monthly collections compared with October 2025, when N873.10 billion was collected, underscores ongoing challenges in revenue mobilisation despite the resolution of legacy debts.
The Presidential cancellation removes nearly 96% of dollar-denominated and 88% of naira-denominated legacy obligations, marking a major step toward resolving historical disputes between NNPC Ltd and the Federation. While this provides relief to the Federation Account, persistent structural challenges in oil and gas revenue collection remain. With 2025 obligations continuing to accrue and royalties consistently under target, strengthened fiscal management and robust monitoring of NNPC Ltd’s operations are critical.
NNPC Ltd reported a surge in revenue, reaching N5.08 trillion in October 2025, up from N4.27 trillion in September. The company’s profit after tax (PAT) rose to N447 billion in October from N216 billion in September. For the full year ended 2024, NNPC Ltd recorded a Profit After Tax of N5.4 trillion from total revenue of N45.1 trillion.
