Nigeria Approves Massive $1.42bn NNPC Debt Write-Off

In a significant move to streamline Nigeria’s financial records, President Bola Tinubu has authorized the cancellation of massive debts owed by NNPC Limited. Following an extensive reconciliation process, the presidency wiped out approximately $1.42 billion and ₦5.57 trillion in legacy obligations.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) detailed this approval in a report during the November 2025 Federation Account Allocation Committee (FAAC) meeting. This directive effectively clears the majority of outstanding liabilities accumulated by the state oil firm through the end of 2024.

Breakdown of the Debt Cancellation

The reconciliation exercise focused on historical debts. These were linked to production-sharing contracts, royalties, and crude oil liftings. By clearing these “nil-off” balances, the government aims to provide a cleaner balance sheet for the newly commercialized entity.

According to NUPRC data:

• Dollar Debt: The directive eliminated roughly 96% of the previously reported $1.48 billion dollar-denominated debt.
• Naira Debt: About 88% of the ₦6.33 trillion naira-denominated obligations were removed.
• Current Status: While legacy debts were cleared, NNPC still holds fresh 2025 statutory obligations totaling over ₦1 trillion.

Revenue Shortfalls and Fiscal Pressure

This debt write-off comes at a critical time. The NUPRC is currently struggling to meet its 2025 revenue projections. For November 2025, actual collections reached only ₦660.04 billion. This figure fell far short of the ₦1.2 trillion monthly target.

Cumulatively, the commission faces a revenue gap of ₦5.65 trillion for the year. Lower-than-expected oil and gas royalty payments largely drive this deficit. These figures remain below target despite ongoing reforms within the energy sector.

Unresolved $42 Billion Audit Dispute

Despite the recent write-off, a separate and more contentious financial battle persists. Authorities have mandated a joint reconciliation session to resolve an alleged $42.37 billion under-remittance from 2011 to 2017.

While the audit firm Periscope Consulting insists on substantial gaps in past records, NNPC Limited has formally rejected the findings. The company maintains that all revenues due to the Federation during that period were fully accounted for.

This stalemate continues to draw scrutiny from international bodies like the World Bank, which has called for greater transparency in fiscal management.

Commitment to Transparency

Under the leadership of Group Chief Executive Officer Bayo Ojulari, NNPC Ltd has pledged to uphold the Petroleum Industry Act (PIA).

Since taking office in April 2025, Ojulari has vowed to entrench efficiency. He aims to ensure that the company’s dealings with the Federation Account remain fully compliant with modern fiscal rules.

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