Business and Economy
NNPC, Consultants Disagree Over $42.3bn Alleged Under-Remittance to Federation Account
Nigeria’s effort to reconcile oil revenues due to the Federation Account has encountered another setback as the Nigerian National Petroleum Company Limited (NNPC Ltd) and Periscope Consulting, the firm engaged by the federal and state governments to review the company’s accounts, have failed to agree on an alleged $42.
The disagreement was revealed in the February 2026 report of the FAAC Post-Mortem Sub-Committee, obtained by THISDAY. The report reviewed unresolved reconciliation matters involving revenues generated by major government agencies.
According to the document, attempts to harmonise figures on crude oil revenue remittances between the national oil company and the consultants have not produced a mutually acceptable figure.
The disputed $42.3 billion is separate from the N210 trillion discrepancy currently under investigation by the National Assembly.
Meanwhile, the Senate has indicated that President Bola Ahmed Tinubu may be invited to respond to questions in his capacity as Minister of Petroleum Resources over the N210 trillion discrepancy identified in NNPC’s audited financial statements.
Chairman of the Senate Public Accounts Committee, Aliyu Wadada, disclosed this during an interview on Sunday.
The FAAC report explained that the reconciliation exercise was initiated to determine the accurate amount of oil revenue owed to the Federation Account by comparing NNPC’s financial records with those compiled by independent consultants.
However, both parties have been unable to reconcile their calculations regarding the $42.3 billion figure, delaying the completion of the exercise.
The report stated: “Recall that the NNPCL and Periscope Consultants were mandated to meet and harmonise their figures before presentation to the Sub-Committee. During the Sub-Committee’s last meeting, NNPCL reported that they are yet to agree with Periscope Consulting regarding the under-remittances of $42.373 billion to the Federation.
“The NNPCL representative stated that they still maintain their earlier position that the company has nothing to refund to the Federation Account. The Sub-Committee gave them a deadline to meet and reconcile their differences and report back before the next FAAC Plenary meeting. This assignment is work in progress.”
The stalemate means authorities have yet to establish the exact amount that should have been remitted by the state-owned oil firm to the Federation Account, which is shared monthly among federal, state and local governments.
The FAAC Post-Mortem Sub-Committee, responsible for reviewing discrepancies in federation revenues and improving transparency in the allocation system, said the unresolved disagreement has slowed progress on the reconciliation process.
The report noted that the committee also examined other revenue-related matters, including deductions from federation revenues and several outstanding financial issues affecting FAAC allocations.
Oil income remains one of Nigeria’s most important sources of public revenue, and disputes over remittances have historically strained relations between the federal government and state administrations that depend heavily on FAAC distributions.
Beyond the dispute over NNPC remittances, the committee also reviewed the financing of frontier oil exploration by the national oil company.
Under the Petroleum Industry Act (PIA), NNPC is mandated to fund exploration activities in frontier basins to expand Nigeria’s oil and gas reserves.
The report stated that NNPC had submitted details of work carried out in the basins and the funds expended on the projects. However, an ad-hoc committee arranged visits to some of the basins for verification and transparency.
“The sub-committee awaits the ad-hoc committee’s report on the outcome. This assignment is still work in progress,” the report added.
Earlier, THISDAY reported that NNPC received more than N453.455 billion from the Frontier Exploration Fund (FEF) in 2025 alone. The sum represented 30 per cent of the total profit realised from Production Sharing Contracts (PSC) in the oil sector during the year.
The fund is intended to support hydrocarbon exploration in frontier basins outside the traditional Niger Delta oil-producing region. These areas include the Chad Basin in the North-east, Sokoto Basin in the North-west, Bida Basin in the North-central region, the Benue Trough and parts of the Dahomey Basin.
However, a recent Executive Order 09 issued by the Tinubu administration directed that proceeds from the fund be paid directly into the Federation Account.
Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, had earlier raised concerns about how the fund was being utilised, alleging that it was not being properly deployed for exploration activities.
He stressed the need for accountability to ensure that the fund is used strictly to support exploration aimed at boosting Nigeria’s oil reserves.
In response, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) denied allegations that it was withholding the fund from NNPC. The commission clarified that the funds are held in an account at the Central Bank of Nigeria and not by the regulator.
NUPRC explained that it only evaluates submitted work programmes and approves disbursements for certified activities. According to the commission, it had already released more than $185 million and N14.9 billion to NNPC for approved exploration work.
The committee also examined deductions linked to government-backed infrastructure financing initiatives that allow companies to undertake public projects in exchange for tax credits. It said an ad-hoc committee was reviewing these deductions to determine their legitimacy and ensure the correct amounts are credited to the Federation Account.
In addition, the committee reviewed several special accounts within the federation’s revenue management system where statutory charges and other government revenues are temporarily held before distribution through FAAC.
As part of its activities, the FAAC Post-Mortem Sub-Committee organised a retreat to assess broader challenges affecting revenue administration in Nigeria.
Participants reviewed the economic environment influencing federation revenues, including sector performance and difficulties facing revenue-generating agencies. Discussions also explored reforms aimed at strengthening transparency and accountability in managing the Federation Account.
The report said stakeholders emphasised the need for stronger oversight mechanisms to ensure that all revenues due to the federation are properly accounted for and remitted promptly.
They also called for closer collaboration among government agencies involved in revenue generation and those responsible for managing and distributing federation funds.
The report noted that resolving the disagreement between NNPC and the consultants is critical to restoring confidence in Nigeria’s oil revenue accounting framework. Until the reconciliation is completed, uncertainty will remain over the exact amount owed to the federation.
For a country heavily dependent on petroleum revenues, the inability to reconcile such a significant figure highlights the persistent challenges in managing Nigeria’s most important income source.
The committee recommended continued engagement between the parties to resolve the discrepancies and conclude the reconciliation process.
It added: “Participants reaffirmed that the Federation Account, established under Section 162 of the 1999 Constitution (as amended), remains the backbone of fiscal sustainability for the three tiers of government. However, persistent revenue leakages, opaque deductions, institutional inefficiencies and weak oversight continue to erode distributable revenues.”
FAAC comprises representatives from several federal institutions and state governments, including officials from the Federal Ministry of Finance, NNPC, Nigeria Inland Revenue Service (NIRS), Nigeria Customs Service (NCS), the Office of the Accountant-General of the Federation, as well as finance commissioners from the 36 states and representatives of local governments.
Meanwhile, indications have emerged that the Senate may invite President Tinubu to answer questions regarding the N210 trillion discrepancy discovered in NNPC’s audited financial statements.
Senate Public Accounts Committee Chairman Aliyu Wadada said lawmakers would not hesitate to question any official, including the president, if necessary to resolve the ongoing investigation into the oil company’s finances.
Speaking on Channels Television’s “Sunday Politics”, Wadada said the Senate was determined to uncover the facts behind the N210 trillion figure in NNPC’s audited financial statements covering the period from 2017 to 2023.
“If the need arises to invite the president or question the president, we will do so,” he said, adding that the investigation was still ongoing.
He explained that the controversial N210 trillion figure came directly from the company’s audited financial statements.
To illustrate the scale of the issue, Wadada noted that Nigeria’s national budgets in recent years ranged between about N8.9 trillion and N10.6 trillion annually. By comparison, the N210 trillion figure is equivalent to nearly a decade of federal spending.
According to him, the amount consists of N103 trillion recorded as accrued liabilities and N107 trillion listed as receivables in NNPC’s accounts.
However, the committee said both figures lacked sufficient documentation.
The N103 trillion liability entry was broadly attributed to retention fees, legal fees and audit fees, but the financial statements did not specify the exact amounts allocated to each category or link them to underlying contracts.
“In accounting principle, for any figure to be accepted as liability or asset, it must pass through the profit and loss account. The figures we are talking about did not pass through the profit and loss account. That is a big failure,” Wadada said.
He also questioned NNPC’s explanation that the liability represented payments to joint venture partners under a cash-call arrangement, noting that the cash-call system had been abolished by the administration of former President Muhammadu Buhari in 2016.
“How then do you explain cash calls appearing in financial records from 2017 onward?” he asked.
The committee also expressed concern about the N107 trillion classified as receivables, which NNPC reportedly attributed to debts owed by unnamed defunct banks.
According to Wadada, the financial statements did not identify the banks involved or indicate how much each owed.
“All NNPCL said is that the money is owed by some defunct banks. No bank was named, no amount attached to any bank. How then do we accept this figure?” he said.
The Senate has already moved to summon several former senior officials of the oil company, including former Group Managing Director Mele Kyari, former Chief Financial Officer Umar Ajiya, and another executive, Bala Wunti, to appear before a public hearing scheduled after the Eid break.
Wadada said the committee initially engaged the company’s external auditors before questioning the current management led by Group Chief Executive Officer Bayo Ojulari, but the explanations provided so far were “not convincing or acceptable.”
Among other issues under scrutiny is the alleged N5.8 billion spent on rebranding the oil company when it transitioned from NNPC to NNPCL following the enactment of the Petroleum Industry Act.
Investigators reportedly discovered what appeared to be a double charge of N2.9 billion each from separate accounts to fund the same exercise.
“The way we got to N5.8 billion is criminal,” Wadada said. “It was a double charge. The same amount was taken twice for the same purpose.”
The committee is also examining alleged duplication in subsidy accounting within the NNPC system.
According to Wadada, both NNPC and one of its subsidiaries, the National Petroleum Investment Management Services (NAPIMS), recorded separate subsidy charges, potentially pushing the disputed figure to about N3.8 trillion.
Despite the scale of the discrepancies, Wadada maintained that the investigation was not politically motivated.
“This is not a political witch-hunt,” he said. “What is wrong is wrong, regardless of who is involved.”
He added that although President Tinubu currently oversees the petroleum ministry, many of the discrepancies being investigated predate his administration, which began in May 2023.
