President Bola Tinubu has authorized the clearance of most of the outstanding debts owed by the Nigerian National Petroleum Company Limited (NNPCL) to the Federation Account, approving the write-off of about 96 percent of the dollar-denominated obligations and roughly 88 percent of the naira liabilities.

The decision effectively eliminates about $1.42 billion and N5.57 trillion from NNPCL’s debt profile following a reconciliation exercise between the company and the Federation Account. Details of the approval are contained in a document prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November meeting of the Federation Account Allocation Committee (FAAC).

According to the report on October 2025 revenue collection presented at the FAAC meeting held on November 18, 2025, NNPCL’s outstanding obligations as earlier reported stood at $1.48 billion and N6.33 trillion, covering PSC, DSDP, RA, and MCA liftings, as well as joint venture and PSC royalty receivables.

Following the reconciliation, the NUPRC disclosed that $1.42 billion and N5.57 trillion of the total liabilities had been cleared, with the commission already effecting the necessary accounting entries in line with the presidential approval.

The commission also revealed that part of the dollar-denominated debt was recovered during the period under review, noting that $55 million was received, leaving an outstanding balance of about $1.8 million and N1.02 trillion. The recovered $55 million was included in the revenue shared by the federation for the month.

Meanwhile, royalty revenues from oil and gas production fell significantly below projections. While the approved monthly royalty target was N1.14 trillion, only N605.26 billion was realized in November, resulting in a shortfall of N538.92 billion.

In the section of the report headed “Recovery from NNPC Ltd Outstanding Obligations,” the commission said 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.”

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

The commission added that part of the dollar component was recovered in the month under review, stating, “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.

As of November 30, 2025, NUPRC’s total approved cumulative revenue stood at N13.25 trillion, but actual collections amounted to N7.60 trillion, leaving a gap of N5.65 trillion. Royalty receipts accounted for most of the deficit, with approved cumulative royalties of N12.59 trillion against actual collections of N6.96 trillion.

The document also showed a month-on-month decline in revenue, as collections dropped from N873.10 billion in October 2025 to N660.04 billion in November.

The development comes amid ongoing scrutiny of NNPCL’s remittances, following an audit by Periscope Consulting, engaged by the Nigeria Governors’ Forum, into allegations of unremitted oil revenues estimated at $42.37 billion between 2011 and 2017.