Efforts to reconcile oil revenues due to the Federation Account have hit a major roadblock, with the Nigerian National Petroleum Company Limited and consultants engaged to audit its accounts failing to agree on a $42.3 billion under-remittance allegedly owed to the federation.
The disagreement, revealed in the February 2026 FAAC Post-Mortem Sub-Committee report obtained by reporters in Abuja, underscores ongoing challenges in managing Nigeria’s critical oil revenue streams. The disputed amount is separate from a far larger N210 trillion discrepancy identified in NNPC’s audited financial statements covering 2017 to 2023.
The report explained that the reconciliation exercise was intended to verify oil revenue remittances by comparing NNPC’s internal records with figures generated by independent consultants, Periscope. However, the parties remain at an impasse.
“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 report said.
The FAAC sub-committee directed both parties to continue discussions and reconcile their differences before the next plenary meeting. Until the exercise is completed, authorities cannot establish the exact volume of oil revenue owed to the Federation Account, which funds allocations to federal, state, and local governments.
The unresolved dispute comes amid broader concerns about NNPC’s management of oil revenues. The sub-committee also reviewed frontier exploration projects financed under the Petroleum Industry Act, which requires the national oil company to fund exploration in frontier basins to expand Nigeria’s hydrocarbon reserves.
NNPC submitted details of work performed and funds spent, but an ad-hoc committee is scheduled to inspect the projects to ensure transparency and accountability. Data shows that the oil company received over N453 billion from the Frontier Exploration Fund in 2025, representing 30 per cent of Production Sharing Contract profits. The fund is intended for frontier basins such as the Chad, Sokoto, Bida, and Dahomey basins, as well as the Benue Trough.
Meanwhile, the Senate has indicated that could be invited to explain the N210 trillion discrepancy uncovered in NNPC’s audited accounts.
Chairman of the Senate Public Accounts Committee, Aliyu Wadada, said the figure—derived from N103 trillion in accrued liabilities and N107 trillion classified as receivables—lacks adequate documentation. The liabilities include retention, legal, and audit fees, while the receivables reportedly relate to unnamed defunct banks.
Wadada also questioned NNPC’s claim that part of the liability represented payments to joint venture partners under a cash-call arrangement, noting that the system was abolished in 2016. The committee has summoned former NNPC officials, including Mele Kyari and former CFO Umar Ajiya, to testify after the Eid break.
The FAAC report highlighted the critical role of oil revenues in Nigeria’s public finances and warned that unresolved discrepancies erode trust and fiscal stability. It also stressed the need for stronger oversight and coordination between revenue-generating agencies and those managing the Federation Account.
“Persistent revenue leakages, opaque deductions, institutional inefficiencies, and weak oversight continue to erode distributable revenues,” the sub-committee noted, urging urgent engagement between NNPC and the consultants to conclude reconciliation.
With public finances heavily dependent on petroleum income, resolving these disputes is essential to restoring confidence in Nigeria’s oil revenue management and ensuring transparency for all tiers of government.