A new report by energy intelligence firm, Argus, has revealed that the Federal Government’s approval to write off about $5 billion in debts owed by the Nigerian National Petroleum Company Limited (NNPC) is part of moves to prepare the firm for a potential initial public offering in 2028.
Argus quoted industry sources as saying the government is cleaning up NNPC’s balance sheet to position the company for a public listing, as Nigeria pursues reforms aimed at attracting foreign investment and boosting transparency in the oil and gas sector.
The Presidency confirmed on Monday that President Bola Tinubu had approved the write-off of NNPC’s dollar-denominated debts totalling $1.42bn, alongside local currency liabilities amounting to N5.57tn, bringing the total cleared obligations to about $5bn at current exchange rates.
According to the government, the debts relate to production sharing contracts under which NNPC acts as concessionaire on behalf of the federation, domestic crude supply obligations, repayment agreements, modified carry arrangements, and unpaid royalties.
However, the Presidency did not disclose which components of the debts were denominated in dollars or naira.
The report read, “The government is readying NNPC for a 2028 initial public offering. These debts were linked to production sharing contracts in which NNPC represents the government as concessionaire, domestic supply obligations, repayment agreements, modified carry arrangements, and royalties. It did not say which were dollar-denominated and which were in naira.”
NNPC had earlier indicated its intention to list part of the company on the stock market, signalling a major shift for the national oil firm following its commercialisation under the Petroleum Industry Act.
In early 2025, the company said it had begun the process of hiring IPO advisers, an issuing house, and investor relations consultants, with Lagos, London, and New York being considered as potential listing venues. The proposed offer could involve the sale of up to 20 per cent of NNPC’s equity.
So, clearing legacy liabilities is a critical prerequisite for any successful listing, as potential investors would require clarity on the company’s financial position. But despite the latest debt write-offs, significant financial uncertainties remain.
Argus reported that the government’s decision does not extend to an estimated $42.4bn from the 2011–2017 period, which authorities say remains disputed and unresolved.
NNPC, however, has consistently maintained that it remitted all revenues due to the federation during that period and owes nothing to the government. In addition, debts accrued between January and October 2025 have not been forgiven.
“Clearing legacy debt off NNPC’s books in preparation for an IPO does not yet extend to $42.4bn from 2011-17, which the government said remains disputed and unresolved. NNPC says it remitted all revenue due and owes nothing to the government for that period. NNPC’s debts to the government for January-October 2025 also “remain outstanding and are actively being tracked and recovered,” with today’s write-offs extending only to the period ending December 2024, the government said.
At the same time, multiple industry sources told Argus that NNPC is in talks to raise fresh financing, including a $5bn crude-backed forward-sale loan from Saudi Arabia’s state-owned oil giant, Aramco.
Under the proposed structure, a special purpose vehicle created by NNPC, known as Green Falcon, would take the loan and use the funds to purchase discounted crude oil from NNPC under a forward-sale agreement.
Green Falcon would then repay Aramco, alongside other associated costs, from proceeds generated through the resale of the crude, the sources said. Part of the new loan is expected to be used to settle obligations linked to an earlier crude-backed financing arrangement known as Project Gazelle.
“NNPC is in the process of taking on sizable new debt, with talks ongoing for a $5bn crude-backed, forward sale loan from Saudi state-controlled Aramco. A special purpose vehicle created by NNPC, called Green Falcon, will take the Aramco loan to buy discounted crude barrels from NNPC under a forward sale agreement, the NNPC source said. Green Falcon will repay Aramco and cover other costs from its resale of the crude.
“Part of the Aramco loan will go towards paying down debt obligations arising from an earlier crude-backed, forward sale SPV called Gazelle, another source said. NNPC borrowed from oil traders using Gazelle under an ‘accordion’ arrangement, which was designed to take on more than $3.3bn in debt and ended up raising $3.2bn,” the report added.
Under the Gazelle structure, NNPC borrowed from oil traders through an “accordion” facility designed to raise more than $3.3bn. The arrangement ultimately generated about $3.2bn in funding. At the time, NNPC said the Gazelle proceeds would be used to fund operating expenses and pay royalties and dividends to the government in advance.
