President Bola Tinubu has approved the cancellation of a large portion of the debts owed by the Nigerian National Petroleum Company Limited to the Federation Account, wiping off about $1.42bn and N5.57tn following a reconciliation of records between both parties.

The approval is contained in a document prepared by the Nigerian Upstream Petroleum Regulatory Commission and presented at the November meeting of the Federation Account Allocation Committee.

The document, titled “Report of October 2025 Revenue Collection Presented at the Federation Account Allocation Committee Meeting Held on 18th November 2025,” was obtained by The PUNCH on Sunday.

In a section of the report titled “Recovery from NNPC Ltd Outstanding Obligations,” the commission stated that the debts earlier 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.”

The commission disclosed that the Presidency had now approved that most of those balances be removed from the Federation Account records.

The document stated, “However, 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.”

Providing further details, the NUPRC explained the specific balances affected by the approval.

“Consequently, out of $1,480,610,652.58 and N6,332,884,316,237.13, the affected outstanding obligations that have been nil off are $1,421,727,723.00 N5,573,895,769,388.45. The commission has passed the appropriate accounting entries as approved.”

An analysis of the figures shows that the presidential directive effectively wiped out about 96 per cent of the dollar-denominated debt and roughly 88 per cent of the naira-denominated obligations previously listed as outstanding.

The document further indicated that the approval followed the recommendations of the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPC Ltd and the Federation, which reviewed the company’s royalty and lifting-related liabilities up to December 31, 2024.

Despite the clearance of the legacy debts, the commission disclosed that new obligations accumulated in 2025 remain outstanding.

In a separate section titled “NNPC Ltd Outstanding Obligations,” the regulator stated that statutory obligations arising between January and October 2025 still stood at “$56,808,752.32 and N1,021,550,672,578.87 for PSC & MCA Liftings and JV Royalty Receivables respectively.”

The commission added that part of the dollar-denominated debt had been recovered within the period under review.

“However, the commission received $55,003,997.00 in the month under review from the outstanding, leaving a balance of $1,804,755.32 and N1,021,550,672,578.87. The amount of $55,003,997.00 received is part of the total collection reported above for sharing by the Federation this month.”

The NUPRC confirmed that the directive had already been implemented in the Federation Account, noting that “the Commission has passed the appropriate accounting entries as approved.”

The approval effectively resolves long-standing disputes over NNPC Ltd’s legacy indebtedness to the Federation, while liabilities arising from ongoing operations continue to be monitored for future recovery.

However, the debt cancellation comes amid challenges faced by the commission in meeting its 2025 revenue projections.

Data contained in the NUPRC document seen by The PUNCH showed that against a 2025 approved monthly revenue target of N1.204tn, the commission recorded an actual collection of N660.04bn for November 2025, leaving a shortfall of N544.76bn for the month.

Royalty payments on oil and gas, which account for the bulk of upstream revenues, also fell significantly below projections.

The approved monthly royalty target was N1.144tn, while actual collections in November stood at N605.26bn, indicating a deficit of N538.92bn.

Cumulatively, as of November 30, 2025, the commission’s total approved revenue stood at N13.25tn, while actual cumulative collections amounted to N7.60tn, representing a revenue gap of N5.65tn.

For royalty revenues alone, cumulative approved collections were N12.59tn compared to N6.96tn actually received, leaving a shortfall of N5.63tn.

The document also showed a decline in revenue performance compared to the previous month, with collections falling from N873.10bn in October 2025 to N660.04bn in November.

The PUNCH had earlier reported a dispute between NNPC Limited and Periscope Consulting, the audit firm engaged by the Nigeria Governors’ Forum to examine an alleged under-remittance of oil revenue amounting to $42.37bn, estimated at about N12.91tn, to the Federation Account between 2011 and 2017.

The disagreement, reignited by fresh submissions from both parties, prompted the Federation Account Allocation Committee to mandate a joint reconciliation session to establish the true state of remittances and resolve the prolonged impasse.

According to a document seen by The PUNCH, the FAAC Sub-Committee confirmed that NNPC Ltd formally rejected the audit findings, insisting that no outstanding revenue was owed to the Federation Account for the period under review.

The national oil company maintained that all crude oil proceeds and associated earnings were fully accounted for, disputing Periscope Consulting’s claims of underpayment.

However, Periscope Consulting rejected NNPC Ltd’s defence, maintaining that its audit uncovered substantial gaps in remittances and that the alleged $42.37bn shortfall remains unresolved.

The report stated, “NNPC Limited submitted their response regarding $42,373,896,555.00 under remittance to the Federation Account as contained in the report of Periscope Consulting. Recall that Periscope Consulting was the Consultant engaged by the Governors’ Forum to examine NNPC Limited under remittance to the Federation Account.

“NNPC Limited responded that all revenues due to the Federation have been properly accounted for and no outstanding amounts for the period under review.”

The disagreement has resulted in a stalemate, with Periscope Consulting accusing the oil company of providing explanations that do not reconcile with the audited figures.

In response, the FAAC Sub-Committee directed both parties to hold a joint reconciliation meeting to harmonise records and resolve the matter.

“Responding, Periscope Consulting disagreed with NNPC Ltd’s position; hence, the Sub-Committee directed that there should be a joint meeting with the two parties to close out on the issue. This assignment is a work in progress,” it added.

Speaking earlier with The PUNCH, a Professor Emeritus of Petroleum Economics, Wumi Iledare, said the alleged $42.37bn under-remittance between 2011 and 2017 reflects structural weaknesses in Nigeria’s pre–Petroleum Industry Act framework.

He explained that the former Nigerian National Petroleum Corporation operated overlapping commercial and regulatory roles, which made revenue reconciliation difficult and frequently disputed.

Iledare described the issue as a legacy problem and stressed that only strict implementation of the Petroleum Industry Act, real-time monitoring, and continuous independent audits can prevent similar disputes in the future.

The World Bank had earlier accused NNPC Ltd of failing to fully remit oil revenues to the Federation Account, thereby undermining fiscal transparency and macroeconomic stability.

The bank noted that although the company was corporatised in 2021 to operate as a commercial entity, it still retains monopolistic control over crude oil sales and foreign exchange inflows, creating persistent gaps between reported earnings and actual remittances.

“NNPC Ltd has remained a key source of revenue leakages,” the World Bank stated, urging the government to “strengthen oversight, ensure full disclosure of oil proceeds, and improve transparency in federation revenue management.”

The World Bank further stated that NNPC Ltd has been remitting only 50 per cent of revenue gains from the removal of the Premium Motor Spirit subsidy to the Federation Account.

According to the bank, out of N1.1tn generated from crude sales and other income in 2024, the company remitted only N600bn, leaving N500bn unaccounted for.

“Despite the subsidy being fully removed in October 2024, NNPC Ltd started transferring the revenue gains to the Federation only in January 2025. Since then, it has been remitting only 50 per cent of these gains, using the rest to offset past arrears,” the World Bank stated.

Since assuming office, the Group Chief Executive Officer of NNPC Ltd, Bayo Ojulari, has repeatedly pledged to entrench transparency, efficiency, and accountability in the company’s operations.

He has consistently assured Nigerians and the global investment community that the company’s financial records would be transparent and that its dealings with the Federation Account would fully comply with fiscal rules.