The Federal Government’s decision to write off about $5 billion in debts owed by the Nigerian National Petroleum Company Limited (NNPC) is part of efforts to prepare the state-owned energy firm for a potential initial public offering (IPO) in 2028, according to a report by energy intelligence firm Argus.
Industry sources cited in the report said the move is aimed at cleaning up NNPC’s balance sheet as Nigeria pursues oil and gas sector reforms to attract foreign investment and improve transparency.
The Presidency confirmed that President Bola Tinubu approved the write-off of $1.42 billion in dollar-denominated debts and ₦5.57 trillion in naira liabilities, covering obligations up to December 2024. The debts relate to production sharing contracts, domestic crude supply obligations, repayment agreements, modified carry arrangements, and unpaid royalties.
NNPC has previously stated its intention to list part of the company following its commercialisation under the Petroleum Industry Act. In early 2025, it began steps to appoint IPO advisers, with Lagos, London, and New York under consideration as potential listing venues. The proposed IPO could involve the sale of up to 20 per cent of the company’s equity.
However, Argus noted that the debt forgiveness does not cover an estimated $42.4 billion from the 2011–2017 period, which the government says remains disputed. NNPC has maintained that it owes nothing from that period, insisting all revenues were remitted. Debts accrued between January and October 2025 were also excluded from the write-off.
The developments highlight the balancing act facing the government as it works to clear legacy liabilities, manage new borrowing, and position NNPC for a landmark public listing.
