The Federal Government has approved the cancellation of a large portion of legacy debts owed by the Nigerian National Petroleum Company Limited to the Federation Account, wiping off about $1.42 billion and N5.57 trillion after a reconciliation exercise.
The decision was contained in a regulatory report prepared by the Nigerian Upstream Petroleum Regulatory Commission and presented at the November meeting of the Federation Account Allocation Committee. The clearance covers historical obligations linked to crude oil liftings, production sharing contracts and joint venture royalties accumulated up to December 31, 2024.
The News Chronicle understands that the approval followed recommendations by a stakeholder committee set up to harmonise disputed claims between NNPCL and the federal government, allowing both parties to reset their financial records after years of unresolved balances.
Before the adjustment, NNPCL’s reported liabilities stood at about $1.48 billion and N6.33 trillion. The reconciliation removed the bulk of these figures from the federation’s books, leaving only a small fraction outstanding.
However, the write off does not apply to obligations incurred in 2025. Statutory liabilities between January and October remain, with balances of roughly $56.8 million and N1.02 trillion tied mainly to lifting charges and joint venture royalties. Part of the dollar component has already been recovered and included in recent federation revenue sharing.
The debt relief comes amid ongoing pressure on upstream revenues. Data presented alongside the reconciliation showed that November collections fell short of target by over N540 billion, largely due to weaker oil and gas royalty inflows.
