A fresh storm is brewing between the Nigeria Governors’ Forum and the Nigerian National Petroleum Company Limited over allegations that the national oil company failed to remit $42.37bn (₦12.9tn) to the Federation Account between 2011 and 2017.
The dispute, revived by new submissions from both sides, has forced the Federation Account Allocation Committee to order an emergency joint reconciliation session after documents reviewed in its November 2025 post-mortem report showed that the two parties remain sharply divided on the issue.
Periscope Consulting, the audit firm engaged by the Governors’ Forum, had accused NNPCL of withholding crude oil proceeds, dividends, and other statutory payments during the six-year period. But NNPCL, in its latest response to FAAC, rejected the findings outright, insisting that its books for the period are clean.
FAAC Confirms Deep Disagreement
FAAC’s report stated that while NNPCL maintains that “all revenues due to the Federation have been properly accounted for,” Periscope insists that its audit uncovered significant unremitted sums that remain unexplained.
The sub-committee consequently directed both parties to meet and “harmonise positions,” describing the matter as still work in progress.
The renewed clash underscores the longstanding friction between state governments and the national oil company over revenue transparency—tensions that earlier culminated in the February 2025 suspension of FAAC’s monthly meeting, when states accused NNPCL of withholding about ₦1.7tn.
Expert: Dispute Is a ‘Legacy Problem’
Professor Emeritus of Petroleum Economics, Wumi Iledare, said the alleged under-remittance is a reflection of systemic weaknesses in the old NNPC structure before the Petroleum Industry Act.
“The former NNPC had conflicting roles that made accountability difficult. These discrepancies are legacy problems,” he said, adding that strict implementation of the PIA and real-time monitoring would prevent similar controversies.
New Questions Over Frontier Exploration Fund
FAAC’s review also flagged gaps in NNPCL's reporting on the 30% Frontier Exploration Fund, a statutory deduction used for exploration in frontier basins. Though NNPCL submitted utilisation records for 2008–2024, the committee said the documents lacked project-by-project details, and requested a breakdown clearly tying each expenditure to specific basins.
The committee is awaiting updated documentation.
₦2.03tn Tax, Royalty Debts Under Review
The post-mortem review also spotlighted ₦2.03tn in outstanding liabilities owed by NNPCL to the Federal Inland Revenue Service and the Nigerian Upstream Petroleum Regulatory Commission between June and December 2023. The amounts—₦1.19tn in royalties and ₦843.28bn in taxes—are currently under reconciliation by the Stakeholders Alignment Committee.
World Bank Renews Transparency Concerns
The World Bank has also raised concerns about revenue leakages, accusing NNPCL of not fully remitting oil proceeds and retaining control over foreign exchange inflows despite its 2021 corporatisation.
It noted that of the ₦1.1tn generated from crude sales and other income in 2024, only ₦600bn was transferred to the Federation Account, while the remaining ₦500bn was used to offset arrears.
The bank described NNPCL as a “persistent source of revenue leakages” and urged the government to enforce stricter disclosure rules.
Transparency Promises vs. Lingering Doubts
NNPCL’s Group Chief Executive Officer, Bayo Ojulari, has repeatedly pledged to improve transparency and assure stakeholders of cleaner, more accountable operations. Yet analysts say the lingering disputes over legacy remittances continue to overshadow the company’s reform commitments.
With FAAC now mediating a high-stakes reconciliation process, federal and state governments are watching closely—aware that any unresolved revenue shortfalls could further strain already fragile public finances.
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