FG wipes $5bn NNPC money owed forward of IPO

The Federal Authorities’s approval to put in writing off about $5bn in money owed owed by the Nigerian Nationwide Petroleum Firm Restricted is a part of strikes to organize the state-owned power agency for a possible preliminary public providing in 2028, a brand new report by Argus has revealed.

Vitality intelligence agency, Argus, on Monday quoted trade sources as saying the federal government is cleansing up NNPC’s stability sheet to place the corporate for a public itemizing, as Nigeria pursues reforms aimed toward attracting overseas funding and boosting transparency within the oil and fuel sector.

The Presidency confirmed on Monday that President Bola Tinubu had permitted the write-off of NNPC’s dollar-denominated money owed totalling $1.42bn, alongside native forex liabilities amounting to N5.57tn, bringing the whole cleared obligations to about $5bn at present alternate charges.

In accordance with the federal government, the money owed relate to manufacturing sharing contracts underneath which NNPC acts as concessionaire on behalf of the federation, home crude provide obligations, compensation agreements, modified carry preparations, and unpaid royalties.

Nevertheless, the Presidency didn’t disclose which parts of the money owed had been denominated in {dollars} or naira.

The report learn, “The federal government is readying NNPC for a 2028 preliminary public providing. These money owed had been linked to manufacturing sharing contracts by which NNPC represents the federal government as concessionaire, home provide obligations, compensation agreements, modified carry preparations, and royalties. It didn’t say which had been dollar-denominated and which had been in naira.”

NNPC had earlier indicated its intention to listing a part of the corporate on the inventory market, signalling a significant shift for the nationwide oil agency following its commercialisation underneath the Petroleum Trade Act.

In early 2025, the corporate stated it had begun the method of hiring IPO advisers, an issuing home, and investor relations consultants, with Lagos, London, and New York being thought-about as potential itemizing venues. The proposed provide may contain the sale of as much as 20 per cent of NNPC’s fairness.

Therefore, clearing legacy liabilities is a crucial prerequisite for any profitable itemizing, as potential traders would require readability on the corporate’s monetary place. However regardless of the most recent debt write-offs, important monetary uncertainties stay.

Argus reported that the federal government’s determination doesn’t lengthen to an estimated $42.4bn from the 2011–2017 interval, which authorities say stays disputed and unresolved.

NNPC, nevertheless, has persistently maintained that it remitted all revenues as a result of federation throughout that interval and owes nothing to the federal government. As well as, money owed accrued between January and October 2025 haven’t been forgiven.

Clearing legacy debt off NNPC’s books in preparation for an IPO doesn’t but lengthen to $42.4bn from 2011-17, which the federal government stated stays disputed and unresolved. NNPC says it remitted all income due and owes nothing to the federal government for that interval. NNPC’s money owed to the federal government for January-October 2025 additionally “stay excellent and are actively being tracked and recovered,” with in the present day’s write-offs extending solely to the interval ending December 2024, the federal government stated.

On the identical time, a number of trade sources instructed Argus that NNPC is in talks to boost recent financing, together with a $5bn crude-backed forward-sale mortgage from Saudi Arabia’s state-owned oil big, Aramco.

Below the proposed construction, a particular objective automobile created by NNPC, referred to as Inexperienced Falcon, would take the mortgage and use the funds to buy discounted crude oil from NNPC underneath a forward-sale settlement.

Inexperienced Falcon would then repay Aramco, alongside different related prices, from proceeds generated by way of the resale of the crude, the sources stated. A part of the brand new mortgage is anticipated for use to settle obligations linked to an earlier crude-backed financing association referred to as Undertaking Gazelle.

“NNPC is within the means of taking over sizable new debt, with talks ongoing for a $5bn crude-backed, ahead sale mortgage from Saudi state-controlled Aramco. A particular objective automobile created by NNPC, referred to as Inexperienced Falcon, will take the Aramco mortgage to purchase discounted crude barrels from NNPC underneath a ahead sale settlement, the NNPC supply stated. Inexperienced Falcon will repay Aramco and canopy different prices from its resale of the crude.

“A part of the Aramco mortgage will go in direction of paying down debt obligations arising from an earlier crude-backed, ahead sale SPV referred to as Gazelle, one other supply stated. NNPC borrowed from oil merchants utilizing Gazelle underneath an ‘accordion’ association, which was designed to tackle greater than $3.3bn in debt and ended up elevating $3.2bn,” the report added.

Below the Gazelle construction, NNPC borrowed from oil merchants by way of an “accordion” facility designed to boost greater than $3.3bn. The association in the end generated about $3.2bn in funding. On the time, NNPC stated the Gazelle proceeds could be used to fund working bills and pay royalties and dividends to the federal government upfront.

The mixture of debt write-offs and recent borrowing highlights the fragile stability going through the federal government because it makes an attempt to wash up NNPC’s books, maintain operations, and put together the corporate for a landmark public itemizing.