Tinubu Government Clears $5 Billion NNPC Debt Ahead Of 2028 IPO

The Federal Government has approved the cancellation of nearly $5 billion in debts owed by the Nigerian National Petroleum Company Limited (NNPC), a move aimed at strengthening the company’s balance sheet ahead of a planned Initial Public Offering (IPO) in 2028.

According to industry reports, the debt write-off is part of a broader reform initiative designed to enhance transparency and attract foreign investment into Nigeria’s oil and gas sector. On Monday, December 29, the Presidency confirmed that President Bola Tinubu authorized the forgiveness of NNPC’s dollar-denominated liabilities totaling $1.42 billion and domestic obligations amounting to ₦5.57 trillion, representing roughly $5 billion in total relief at current exchange rates.

The debts cleared include obligations arising from production sharing contracts, domestic crude supply agreements, repayment arrangements, modified carry structures, and unpaid royalties. While the government disclosed the total amount forgiven, it did not specify which portions were in dollars and which were in naira.

NNPC has indicated its intention to go public following its commercialisation under the Petroleum Industry Act (PIA), with potential listings in Lagos, London, and New York. Up to 20% of the company’s equity could be sold to investors. Analysts note that settling long-standing debts is a critical step to ensure transparency and secure investor confidence ahead of the IPO.

Despite this recent debt relief, an estimated $42.4 billion in legacy obligations from 2011 to 2017 remains unresolved, as these debts are disputed. Liabilities accrued between January and October 2025 have also not been forgiven, with the government confirming that only debts up to December 2024 have been cleared.

In parallel with the debt write-off, NNPC is negotiating new financing, including a $5 billion crude-backed forward-sale loan with Saudi Aramco. A special purpose vehicle (SPV) named Green Falcon would manage the loan, purchasing discounted crude from NNPC and repaying Aramco through resale proceeds. Part of the new financing will also be used to settle debts under Project Gazelle, a prior $3.2 billion crude-backed forward-sale arrangement.

This combination of debt forgiveness and new financing highlights ongoing financial restructuring at NNPC as Nigeria seeks to position the company as a modern, commercially driven energy firm capable of competing globally.