The Federal Government has written off about $5 billion in debts owed by the Nigerian National Petroleum Company Limited as part of sweeping reforms to prepare the firm for a landmark initial public offering planned for 2028.
Energy research group Argus reports that the clean-up is aimed at strengthening NNPC’s balance sheet and boosting investor confidence as Nigeria moves to attract foreign capital.
The Presidency confirmed that President Tinubu approved the forgiveness of $1.42bn in dollar-denominated liabilities and N5.57tn in naira obligations linked to production sharing contracts, domestic crude supply arrears, and modified carry arrangements.
But uncertainties remain. The government says another $42.4bn in disputed liabilities covering 2011–2017 remains unresolved, while debts incurred from January to October 2025 are still outstanding.
Meanwhile, NNPC is negotiating fresh financing—including a $5bn crude-backed forward-sale loan from Saudi oil giant Aramco.
Under the proposed arrangement, NNPC’s special-purpose vehicle, Green Falcon, will purchase discounted crude and repay Aramco from resale proceeds. Part of the loan will settle existing commitments under an older forward-sale facility known as Project Gazelle.
Analysts say the simultaneous debt clean-up and new borrowing underline the balancing act ahead as NNPC prepares for public listing while keeping operations afloat.
