FAAC: Governors Demand Evidence of Presidential Write-off of NNPC’s $1.42bn, N5.5tn Debt

*National oil firm requests more time on $42.3bn alleged under-remittance

*FAAC committee demands physical verification of FEF projects

Emmanuel Addeh in Abuja

The Nigerian governors have demanded evidence of President Bola Tinubu’s recent write-off of $1.42 billion and N5.5 trillion of legacy debts owed to the Federation by the Nigerian National Petroleum Company Limited (NNPC Ltd.).This is consistent with the national oil company’s request for more time to comply with the format agreed with the Federation Account Allocation Committee (FAAC) for its explanation of the $42.37 billion alleged under-remittance to the federation.A document sighted by THISDAY indicated that the issue arose during the January 2026 FAAC post-mortem review, during which the states insisted that the federal authorities provide detailed accounts of these figures, including the basis for the write-off. Additionally, an ad hoc committee set up by FAAC to examine the utilisation of the revenues deducted in respect of the statutory 30 per cent Frontier Exploration Fund (FEF) insisted that it must physically verify all projects carried out using the over N400 billion earmarked for NNPC during the period.

The Minister of Finance chairs the FAAC, which comprises the Accountant-General of the Federation (AGF), State Commissioners of Finance who represent the governors, and representatives from federal revenue-generating agencies.THISDAY gathered that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which first disclosed the presidential order at an earlier FAAC meeting, requested additional time to make the documents available, citing the recent change in its management.

“It should be noted that the NUPRC presented the sum of $1,421,727,723.00 and N5,573,895,769,388.45 as outstanding NNPC obligation to the Federation Account, which NUPRC claimed that it was netted off in line with a presidential approval. The Sub-Committee requested the Presidential Approval, and NUPRC asked for more time because of the change in the Commission’s leadership,” the document indicated.

Earlier, the NUPRC announced that President Tinubu had approved the cancellation of about $1.42 billion and N5.57 trillion in outstanding legacy obligations owed by the NNPC to FAAC, following a reconciliation of records between the parties.The upstream regulator said the presidential approval followed recommendations from the stakeholder alignment committee, which examined the company’s royalty and lifting-related liabilities through December 31, 2024.

“Debts earlier reported during the October 2025 FAAC meeting stood at $1,480,610,652.58 and N6,332,884,316,237.13 for…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 Limited and the Federation,” the regulator had said.

“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 and N5,573,895,769,388.45. The commission has passed the appropriate accounting entries as approved,” it added.In the same vein, after denying that it owed the federation an outstanding sum of $42.3 billion in unremitted funds, FAAC provided NNPC with a template to record all its earnings and liabilities for the period in question, to facilitate reference.However, the national oil company requested more time to resolve the matter, a request the committee accepted, according to the document from the January FAAC meeting.

“The sub-Committee invited NNPC and Periscope Consultants for a final reconciliation meeting on the 8th of January, 2026. However, NNPC requested more time to input their figures into the template agreed by the Committee. Subsequently, NNPC’s representatives and Periscope agreed to meet and harmonise the figures before presentation to the committee. This assignment is work in progress,” the FAAC document showed.

Also, the governors, alongside other members of the FAAC committee, demanded a physical verification of the projects carried out by NNPC using the frontier exploration fund, following concerns raised. A review by THISDAY recently showed that the money realised over about 10 months exceeded N400 billion. “The ad-hoc committee set up to examine the utilisation of the revenues deducted in respect of Frontier Exploration Fund reported that the Committee had studied NNPC, CBN, and NUPRC submissions and had prepared an interim report. However, the Ad-hoc Committee explained that there is a need for physical verification of some projects executed to ensure accountability and transparency.

“Accordingly, the ad-hoc committee and NNPC were mandated to work out modalities for the visits. This assignment is still a work in progress,” the FAAC document added. The frontier exploration fund is a statutory funding mechanism created under the Petroleum Industry Act (PIA) to support new oil and gas exploration in the country’s underexplored or ‘frontier’ basin areas like Chad, Sokoto, Anambra, Benue, and other inland basins where commercial hydrocarbon discoveries have historically been limited.

Under the PIA, a portion of revenues from upstream petroleum operations is set aside specifically for frontier exploration.This includes 30 per cent of the NNPC’s profit oil and profit gas under production‑sharing, profit‑sharing, and risk‑service contracts, along with portions of rents from petroleum prospecting licences and mining leases.