By Obinna Uballa
The efforts by Nigeria’s federal government to reconcile oil revenues due to the Federation Account have suffered another setback after the Nigerian National Petroleum Company Limited (NNPCL) and consultants engaged by the federal and state governments failed to agree on a $42.3 billion under-remittance allegedly owed to the federation.
The disagreement first emerged in the February 2026 report of the Federation Account Allocation Committee Post-Mortem Sub-Committee, which reviewed unresolved reconciliation issues involving revenues from key government agencies.
According to the document, the national oil company and Periscope, the consultants hired to examine NNPC’s records on behalf of the federation, were unable to harmonise their figures on the amount believed to be outstanding.
The disputed $42.3 billion is separate from a much larger financial discrepancy of N210 trillion currently being investigated by the Nigerian Senate in the company’s audited financial statements.
The FAAC report stated that the reconciliation exercise was meant to establish the accurate amount of crude oil revenue due to the Federation Account by comparing NNPC’s internal records with those generated by independent consultants.
However, both parties failed to reach a common position. The report said: “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.”
It added that NNPC maintained its earlier stance that it had no outstanding funds to return to the Federation Account.
“The NNPCL representative stated that they still maintain their earlier position that the company has nothing to refund to the Federation Account,” the report noted.
The sub-committee subsequently directed both parties to continue discussions and reconcile their positions before the next FAAC plenary meeting.
The unresolved dispute means authorities have yet to establish the precise volume of oil revenues that should have been remitted by the state-owned oil company into the Federation Account, the pool from which the federal, state and local governments share revenues monthly.
Oil earnings remain Nigeria’s most important public revenue source, and discrepancies in remittances have historically triggered tensions between the federal government and subnational authorities that depend heavily on FAAC allocations.
Beyond the remittance dispute, the FAAC sub-committee also examined the controversial financing of frontier exploration activities undertaken by NNPC under the Petroleum Industry Act.
The legislation mandates the oil company to fund exploration in frontier basins aimed at expanding Nigeria’s hydrocarbon reserves. According to the report, NNPC had submitted details of exploration work carried out in several basins, along with the amounts expended.
However, an ad-hoc committee established by FAAC is expected to physically inspect some of the projects to verify the claims.
“The ad-hoc committee arranged for a visit to some of the basins as requested by the sub-committee for transparency and accountability purposes. The sub-committee awaits the report of the visit,” the document said.
Recent data show that NNPC received over N453 billion in 2025 alone from the Frontier Exploration Fund, representing 30 per cent of profits from oil production sharing contracts in line with statutory provisions.
The fund finances exploration in frontier basins such as the Chad Basin, Sokoto Basin, Bida Basin, Benue Trough and parts of the Dahomey Basin.
Meanwhile, the Nigerian Senate Public Accounts Committee has signalled that President Bola Tinubu could be invited to provide explanations over a separate N210 trillion discrepancy uncovered in NNPC’s audited accounts covering 2017 to 2023.
Chairman of the committee, Aliyu Wadada, said the Senate would not hesitate to question any official, including the president, if necessary.
Speaking on Channels Television’s “Sunday Politics,” Wadada said the disputed amount-recorded in the company’s audited financial statements-comprised N103 trillion listed as accrued liabilities and another N107 trillion classified as receivables.
He said both figures lacked adequate documentation.
“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,” he said.
Lawmakers also questioned NNPC’s explanation that part of the liability represented payments to joint venture partners under a cash-call system, noting that the arrangement had been abolished in 2016.
Further concerns were raised about the N107 trillion recorded as receivables, which the company reportedly attributed to debts owed by unnamed defunct banks.
According to Wadada, the financial statements failed to identify the banks involved or specify the amounts owed by each institution.
The New Diplomat had reported that the Senate committee has summoned several former senior executives of the oil company, including ex-group managing director Mele Kyari and former chief financial officer Umar Ajiya, to testify at a public hearing expected after the Eid break.
Despite the scale of the discrepancies, Wadada insisted the probe was not politically motivated but aimed at ensuring transparency in the management of Nigeria’s oil revenues.
“This is not a political witch-hunt,” he said. “What is wrong is wrong, regardless of who is involved.”
