Nigeria’s long-running effort to reconcile oil revenues due to the Federation Account has hit another obstacle after Nigerian National Petroleum Company Limited (NNPC Ltd) and Periscope, the consultants engaged by the federal government and governors to review the company’s accounts, failed to agree on a $42.3 billion liability believed to be owed to the federation.

The disagreement was disclosed in the FAAC Post-Mortem Sub-Committee Report for February 2026, seen by THISDAY, which reviewed outstanding reconciliation issues involving revenues generated by key government agencies.

The document indicated that attempts to reconcile crude oil revenue remittances between the national oil company and consultants working on behalf of the federation had yet to produce a mutually agreed figure.

The $42.3 billion is aside from the N210 trillion discrepancy currently being investigated by the National Assembly.

Senate yesterday signalled that President Bola Tinubu might eventually be invited to answer questions in his capacity as Minister of Petroleum Resources over the staggering N210 trillion discrepancy uncovered in the Audited Financial Statements (AFS) of NNPC.

Chairman of Senate Public Accounts Committee, Aliyu Wadada, gave the hint on Sunday.

According to the FAAC report, the reconciliation exercise was designed to determine the accurate amount of oil revenue due to the Federation Account by comparing NNPC’s records with those generated by independent consultants.

However, both parties were unable to align their calculations regarding the $42.3 billion, stalling the reconciliation process.

The document 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 development means that the authorities have not been able to conclusively establish the exact volume of funds that should have been remitted by the state-owned oil company to the Federation Account, from which revenues are shared among the federal, state and local governments.

The FAAC Post-Mortem Sub-Committee, which is responsible for examining discrepancies in federation revenues and improving transparency in the revenue-sharing framework, stated that the unresolved differences between NNPC and the consultants had delayed the completion of the reconciliation exercise.

The report explained that the committee had reviewed several revenue-related matters during the period under consideration, including reconciliation efforts involving government agencies, deductions made from federation revenues, and the status of various outstanding financial issues affecting FAAC allocations.

Oil revenues represent one of the most critical sources of funding for Nigeria’s public sector, and unresolved discrepancies in remittances have historically created tensions between federal authorities and subnational governments that depend heavily on monthly FAAC allocations.

Beyond the dispute over NNPC remittances, the committee also reviewed other financial matters affecting the Federation Account. A critical issue examined by the sub-committee involved the controversial financing of frontier exploration activities by NNPC.

Under the provisions of the Petroleum Industry Act (PIA), the national oil company has the responsibility to fund exploration in frontier basins aimed at expanding Nigeria’s oil and gas reserves.

The committee stated, “NNPCL has provided all the work carried out within the basins together with the amount expended on the projects. However, 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 ad-hoc committee’s report on the outcome. This assignment is still work in progress.”

A recent report by THISDAY indicated that NNPC received over N453.455 billion in the 12 months of 2025 alone from the newly established Frontier Exploration Fund (FEF).

The figure represented 30 per cent of the total Production Sharing Contract (PSC) profit realised from oil during the year, in line with statutory provisions that allocate the funds to frontier exploration.

The frontier exploration fund is designed to finance hydrocarbon exploration activities in Nigeria’s frontier basins, areas outside the traditional Niger Delta producing belt where commercial discoveries have yet to be fully established. These include Chad Basin in the North-east, Sokoto Basin in the North-west, Bida Basin in North-central Nigeria, Benue Trough, and parts of the Dahomey basin. However, with Executive Order 09 published by the Tinubu administration weeks ago, the fund will now go directly to the federation account.

Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, had raised posers over the use of the exploration fund, prior to the executive order. Lokpobiri accused some individuals of improper use of FEF.

He said while the fund was created to finance frontier basin oil exploration, it had not been deployed effectively for that purpose.

The minister stressed the need for accountability, saying and the money should be directed genuinely for exploration activities aimed at increasing Nigeria’s reserves.

At the time, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the erstwhile approving authority, responded specifically to allegations that it was withholding the fund from the national oil company. The commission categorically denied the claims, explaining that the fund is not held by NUPRC but in a Central Bank of Nigeria (CBN) account.

NUPRC said it merely evaluated submitted work programmes and approved disbursements based on certified activities, and that it had already released significant amounts, over $185 million and N14.9 billion, to NNPC.

Besides, among the issues discussed were deductions associated with government-backed initiatives, such as infrastructure financing arrangements, which allowed companies to invest in public projects in exchange for tax credits.

The report indicated that the relevant ad-hoc committee had continued to review the deductions in order to determine their legitimacy and ensure that the appropriate amounts were credited to the Federation Account.

The committee also assessed the status of various accounts associated with the federation’s revenue management system. They include special accounts that hold funds generated from statutory charges and other government revenue streams before they are distributed through the FAAC allocation process.

As part of its work, FAAC Post-Mortem Sub-Committee said it organised a retreat aimed at reviewing broader issues affecting revenue administration within Nigeria’s fiscal system. Participants at the retreat examined the economic environment within which federation revenues were generated, including the performance of different sectors of the economy and the challenges facing revenue collection agencies.

Discussions also focused on possible reforms that could strengthen transparency and accountability in the management of the Federation Account.

According to the report, the retreat provided an opportunity for stakeholders to assess the effectiveness of existing policies governing federation revenue administration and identify areas where improvements could be made.

Participants emphasised the importance of stronger oversight mechanisms to ensure that all revenues due to the federation were properly accounted for and remitted in a timely manner. They also highlighted the need for closer collaboration between government agencies involved in revenue generation and those responsible for managing and distributing federation funds.

The report suggested that resolving the differences between the national oil company and the consultants would be critical to improving confidence in Nigeria’s oil revenue accounting framework. Until the reconciliation exercise is concluded, it said uncertainty will remain regarding the precise amount of oil revenue owed to the federation.

For a country where public finances depend heavily on petroleum income, the inability to reconcile such a large figure underscores the continuing challenges associated with managing Nigeria’s most important revenue stream.

The FAAC post-mortem sub-committee recommended that further engagement between the parties be pursued to resolve the discrepancies and complete the reconciliation process, paving the way for greater clarity in the management of federation revenues.

The FAAC report said, “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, it was unanimously observed that persistent revenue leakages, opaque deductions, institutional inefficiencies, and weak oversight continue to erode distributable revenues.”

FAAC is made up of representatives of key federal institutions and the state governments. These include officials from Federal Ministry of Finance, NNPC, Nigeria Inland Revenue Service (NIRS), Nigeria Customs Service (NCS), Office of the Accountant-General of the Federation, as well as commissioners for finance from the 36 states and representatives of local governments.

Meanwhile, indications emerged yesterday that the senate might invite Tinubu to answer questions in his capacity as Minister of Petroleum Resources on a staggering N210 trillion discrepancy uncovered in the audited financial statements of NNPC.

Chairman of Senate Public Accounts Committee, Aliyu Wadada, said the upper chamber would not hesitate to question any official, including the president, if the ongoing investigation into the oil company’s finances required it.

Speaking during an interview on “Sunday Politics” on Channels Television, Wadada insisted Senate was determined to unravel the mystery surrounding the N210 trillion figure contained in NNPCLs audited accounts covering 2017 to 2023.

“If the need arises to invite the president or question the president, we will do so,” Wadada said. He stressed that the committee’s probe was still ongoing.

The development comes amid mounting national concern over the enormous financial discrepancies identified in the oil company’s books, an amount the senate says dwarfs several years of Nigeria’s national budgets.

According to Wadada, the controversial N210 trillion figure emerged directly from the company’s audited financial statements and was not fabricated by lawmakers.

To illustrate the scale of the issue, the senator compared the disputed amount with Nigeria’s annual federal budgets in recent years. Nigeria’s 2018 national budget was about N9 trillion, and it was N8.9 trillion in 2019, and N10.6 trillion in 2020. By contrast, the figure under scrutiny, N210 trillion, is equivalent to roughly a decade of federal spending.

“This is almost 10 years or more of Nigeria’s national budget. Yet the figure is contained in the audited financial statements,” Wadada said.

He explained that the total sum was made up of two major components: N103 trillion recorded as accrued liabilities and another N107 trillion listed as receivables in the oil company’s books.

However, the committee said both figures lacked adequate documentation or substantiation.

The N103 trillion liability entry, according to Senate, was attributed broadly to three items – 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 any underlying contracts.

Wadada said, “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.”

He said the absence of detailed breakdowns raised serious questions about the credibility of the entries.

The senate committee also queried NNPC’s subsequent explanation that the N103 trillion represented payments to joint venture partners under a cash-call arrangement.

Wadada stated that such an explanation was inconsistent with government policy. He stressed 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?” Wadada asked.

Equally troubling to the lawmakers, he said, was the N107 trillion classified as receivables, which the company, reportedly, said was owed by unnamed defunct banks.

According to Wadada, the audited statements failed to identify the banks involved or specify how much each allegedly owed.

“All NNPCL said is that the money is owed by some defunct banks,” he said. “No bank was named, no amount attached to any bank. How then do we accept this figure?” he queried.

The committee has already moved to summon several former top officials of the oil company, including its former Group Managing Director, Mele Kyari, former Chief Financial Officer, Umar Ajiya, and another senior executive, Bala Wunti, to provide explanations at a public hearing expected 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 by the new management were “not convincing or acceptable,” Wadada said.

Among other contentious issues raised during the probe was the alleged N5.8 billion spent on rebranding the national oil company, when it transitioned from NNPC to NNPCL following the enactment of the Petroleum Industry Act.

The senator said investigators 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,” he explained.

The senate committee also raised concerns over alleged duplication in subsidy accounting within the NNPC system.

Wadada said both NNPC and one of its subsidiaries, National Petroleum Investment Management Services (NAPIMS), separately recorded subsidy charges, which could push the disputed figure to about N3.8 trillion.

Despite the scale of the allegations, Wadada insisted the probe was not politically motivated.

He said the investigation was aimed solely 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.”

He added that while the president currently oversaw the petroleum ministry, the discrepancies being examined largely predated the administration of Tinubu, who assumed office in May 2023. (THISDAY)

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