The Nigerian federal government has canceled a substantial portion of the debts inherited from the Nigerian National Petroleum Company Ltd. (NNPCL) to the Federation account. This operation amounts to approximately $1.42 billion US dollars and 5.570 trillion nairas, following a reconciliation exercise validated by President Bola Tinubu.
The decision is formalized in a regulatory document prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November meeting of the Federation Account Allocation Committee (FAAC). It concerns the clearance of long-standing balances, particularly related to crude oil liftings, production sharing contracts, and joint venture royalties, up to the end of 2024.
According to the regulatory body, this approval follows the work of a stakeholder committee established to reconcile the reciprocal claims between the national oil company and the federal government. The NUPRC specifies that it has received presidential approval to cancel the outstanding obligations of NNPC Ltd as of December 31, 2024, as submitted by the Stakeholder Alignment Committee responsible for reconciling debts between NNPC and the Federation.
Before adjustment, the obligations reported to the FAAC amounted to approximately $1.48 billion and 6.330 trillion nairas. After reconciliation, the amounts actually canceled reach $1,421,727,723 and 5,573,895,769,388.45 nairas, with corresponding accounting entries made in accordance with the approvals obtained. This cancellation represents approximately 96% of the debt denominated in dollars and nearly 88% of the obligations in nairas previously classified as outstanding.
