NNPC’s Losses Hit N35.4bn In Two Months

November 4, 2016 9News Nigeria Breaking News, Hot News, Nigerian economy 0

The revenue losses recorded by the Nigerian National Petroleum Corporation (NNPC) have hit N35.4 billion in two months, as profits woes rocking the corporation worsened. This was contained in the monthly financial and operations report released  on the corporation’s website yesterday.

Specifically, the stateowned oil firm, in July and August, recorded losses triggered by the force majeure declared by Shell Petroleum Development Corporation (SPDC). The drawback was caused by the vandalised 48-inch Forcados export line, which impacted negatively on the overall group performance. The loss has also reduced payment into Federation Account, NNPC said, adding that it transferred N35.05 billion into the account last September from the net domestic crude oil receipt and another N1.80 billion from gas receipts, over N20 billion short of the N56.22 billion it transferred to the federation account in April.

“NNPC transferred N56.22 billion to the Federation Account for the month of April, being proceeds from local sale of petroleum products. Thus, the sum of N933.12 billion has been paid to the Federation Account Allocation Committee (FAAC) from March, 2015 to April, 2016,” the report in June showed.

While NNPC announced a trading deficit of N24.18 billion loss last July, it posted a month-end trading deficit of N11.22 billion in August. The corporation, in May, reported a profit of N273.74 million, thus reversing its reported average monthly losses of N35 billion before May.

It has, however, failed to sustain the profit-making streak, and has in the last two months, recorded huge deficits amounting to N35.4 billion. The corporation, the report showed, was, however, able to cut down on its lossmaking by N12.96 billion when compared with its deficits in previous months.

The deficits were recorded even though two of its subsidiaries – the Pipeline and Products Marketing Company (PPMC) and Nigerian Petroleum Development Company (NPDC) – had a good operational outing during the month. The report also said crude oil production in Nigeria for the period averaged 1.65 million barrels per day (mbpd), representing a 6.47 per cent production decrease from the previous month.

This indicates a trading deficit of N11.22 billion as against the reported July 2016 deficit figure of N24.18 billion. The report stated: “This remarkable improvement in August 2016 was largely due to increase in PPMC’s coastal sales and the significant improvement in NPDC’s revenue for the month under review.

“However, it is imperative to note that the existing force majeure declared by SPDC as a result of vandalised 48-inch Forcados export line is a drag to NPDC and the overall group performance. “Other factors that negatively impacted on production include force majeure at Qua Iboe terminal following sabotage on the export loading line 2, sabotage of Trans Niger Pipeline, Claugh Creek-Tebidaba pipeline and Escravos terminal delivery pipelines.”

The Forcados terminal alone accounts for 300,000 barrels per day (bpd). Productions from the deep-water assets, which are beyond easy reach by militants, have remained steady, but that onshore and shallow water assets are the worst hit by security breaches.

The corporation added that securing onshore and shallow water locations had also remained a top priority to restore production levels. Meanwhile, the NNPC said that pipeline vandalism across the country had reduced by 28 per cent. According to the 13th publication of Monthly Financial and Operations Report released yesterday, the spate of pipeline vandalism has reduced following the Federal Government and NNPC’s sustained engagements with Niger Delta militants.

“In August, 2016, there was 28.94 per cent drop in the number of pipelines vandalised points relative to July 2016, which had up to 311 vandalised points,” the report stated.

On natural gas supply to power plants, the study stated that it edged up to 469 million standard cubic feet per day (mmscfd), which equalled about 2,083 megawatts of electricity generation in August, 2016. On refineries’ operations, the report said that the combined value of output by the three refineries “at import parity price” for August 2016 was N50.19 billion. Besides, it noted that its installment repayment of debt to the Federation Account was also done with N6.33 billion remitted as the 25th instance in the process.

“The domestic crude oil and gas receipt during the month amounted to N96.15 billion, consisting of N1.80 billion from domestic gas and the sum of N88.01 billion from domestic crude oil. “Of the N88.01 billion receipt from crude oil, the sum of N52.96 billion (about $268.83 million) was transferred to Joint Venture Cash Call (JVCC) being a first line charge. “It also guarantees a continuous flow of revenue stream to Federation Account,” the report said. Meanwhile, the NNPC yesterday revealed plan to collaborate with the Republic of Niger in the area of sharing of geological data to further boost the ongoing exploratory activities in the Chad Basin and Benue Trough.

The Group Managing Director of the NNPC, Dr. Maikanti Baru, stated this in a statement, after a bilateral discussion with the Minister of Energy and Oil of the Republic of Niger, Hon. Foumakoye Gado in Abuja. According to Baru, there is an understanding between the NNPC and the Republic of Niger to share data on the exploratory activities in the Chad Basin and the Benue Trough and to tap into that country’s experience.

He also disclosed that there were plans to collaborate on the possibility of having crude oil supply from Niger to the Kaduna Refining and Petrochemical Company (KRPC).

“We plan to set up the technical team to review the possibilities of how crude oil will be supplied to Kaduna Refinery. Being bilateral, there are going to be two teams as discussed by the Minister of State, Petroleum Resources and the Minister of Energy and Oil of Niger. There will be steering committee comprising some ministers and a technical committee, which will involve the NNPC and the Nigerien Ministry of Energy and Oil and their operators,” Baru revealed.