The approval, granted by President Bola Tinubu, covers a combination of foreign and domestic liabilities accumulated by the national oil company over several years. According to details presented at a recent Federation Account Allocation Committee (FAAC) meeting, the write-off includes $1.42 billion in dollar-denominated debt and N5.57 trillion in naira liabilities.
The debts were described as “legacy obligations” linked to production sharing contracts, domestic crude oil supply arrangements, and unpaid royalties, with records dating up to the end of December 2024. Government officials said the decision followed an extensive reconciliation exercise carried out by the Nigerian Upstream Petroleum Regulatory Commission to clarify outstanding claims between NNPC and the Federation.
Sources familiar with the matter explained that the move is part of a broader strategy to clean up NNPC’s balance sheet and position the company for an Initial Public Offering (IPO) expected around 2028. Analysts note that heavy legacy debts would significantly weaken the company’s valuation and limit investor appetite, particularly from international capital markets.
Under the Petroleum Industry Act of 2021, NNPC was transformed from a state-owned corporation into a limited liability company, with a mandate to operate on a fully commercial basis. The law also envisages eventual listing on a stock exchange to improve transparency, accountability, and operational efficiency.
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In a related development, NNPC reportedly wrote off about N4.01 trillion in subsidy arrears and other obligations owed to it by the Federal Government. This two-way cancellation effectively netted off mutual debts between both parties, reducing the overall financial exposure on each side.
However, officials clarified that the write-off applies only to debts accumulated up to December 2024. New obligations incurred between January and October 2025, estimated at over $56 million and about N1 trillion, remain outstanding and are still being tracked for recovery.
The government described the decision as a strategic financial restructuring step designed to reposition NNPC as a commercially viable and investment-ready energy company.
The Federal Government has approved a major debt write-off for the Nigerian National Petroleum Company Limited (NNPC Ltd), cancelling obligations estimated at about $5 billion in a move aimed at strengthening the company’s financial position ahead of a planned public listing.
The approval, granted by President Bola Tinubu, covers a combination of foreign and domestic liabilities accumulated by the national oil company over several years. According to details presented at a recent Federation Account Allocation Committee (FAAC) meeting, the write-off includes $1.42 billion in dollar-denominated debt and N5.57 trillion in naira liabilities.
The debts were described as “legacy obligations” linked to production sharing contracts, domestic crude oil supply arrangements, and unpaid royalties, with records dating up to the end of December 2024. Government officials said the decision followed an extensive reconciliation exercise carried out by the Nigerian Upstream Petroleum Regulatory Commission to clarify outstanding claims between NNPC and the Federation.
Sources familiar with the matter explained that the move is part of a broader strategy to clean up NNPC’s balance sheet and position the company for an Initial Public Offering (IPO) expected around 2028. Analysts note that heavy legacy debts would significantly weaken the company’s valuation and limit investor appetite, particularly from international capital markets.
Under the Petroleum Industry Act of 2021, NNPC was transformed from a state-owned corporation into a limited liability company, with a mandate to operate on a fully commercial basis. The law also envisages eventual listing on a stock exchange to improve transparency, accountability, and operational efficiency.
In a related development, NNPC reportedly wrote off about N4.01 trillion in subsidy arrears and other obligations owed to it by the Federal Government. This two-way cancellation effectively netted off mutual debts between both parties, reducing the overall financial exposure on each side.
However, officials clarified that the write-off applies only to debts accumulated up to December 2024. New obligations incurred between January and October 2025, estimated at over $56 million and about N1 trillion, remain outstanding and are still being tracked for recovery.
The government described the decision as a strategic financial restructuring step designed to reposition NNPC as a commercially viable and investment-ready energy company.
