President Bola Tinubu has approved the cancellation of about $1.42 billion and ₦5.57 trillion in legacy debts owed by the Nigerian National Petroleum Company Limited (NNPCL) to the Federation Account, a presidential directive dated December 29, 2025 shows.
The approval follows a formal reconciliation of financial records between the federal government and NNPCL.
The debt cancellation was detailed in a report prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the Federation Account Allocation Committee (FAAC) meeting held on November 18, 2025.
The review covered outstanding obligations linked to crude oil liftings, production‑sharing contracts, joint venture royalties, and other related liabilities.
Before the write‑off, NNPCL’s legacy obligations recorded at the October 2025 FAAC meeting stood at approximately $1,480,610,652.58 and ₦6,332,884,316,237.13.
Under the presidential directive, about $1,421,727,723 and ₦5,573,895,769,388.45 of those liabilities were removed from the Federation Account books, representing roughly 96% of the dollar‑denominated and 88% of the naira‑denominated legacy debts previously recorded.
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Officials said the cancellation covers legacy debts accumulated up to December 31, 2024, resolving long‑standing disputes over historical financial obligations between NNPCL and the federal government.
The NUPRC also noted that new statutory obligations arising in 2025 remain outstanding.
Debts incurred between January 1 and October 31, 2025 stood at about $56.8 million and ₦1.02 trillion relating to lifting charges and royalty receivables, and are still being monitored for recovery.
The cancellation comes amid ongoing concerns about revenue shortfalls in Nigeria’s upstream oil sector, with royalty and overall revenue collections in late 2025 falling below approved FAAC targets.