Nigeria’s state-oil firm, NNPC, lost N418.97 billion in 21 months – Report

The group operations of the Nigerian National Petroleum Corporation, NNPC, recorded a cumulative loss of N411.1 billion in 21 months between January 2015 and September 2016, the Nigerian Extractive Industries Transparency Initiative, NEITI, has stated.

In report, the agency said its review of the NNPC’s monthly financial and operational reports show that the national oil company earned marginal profits in only two months during the period under review.

“Apart from January 2015 when the group made a profit of N7.6 billion, it also realised N0.27 billion as profit in May 2016, with total profit in 21 months coming to N7.87 billion, as against the loss of N418.97 billion, with total loss coming to N411.1 billion,” NEITI said in its report.

A review of the losses revealed volatility in the pattern in which its expenditure consistently outstripped revenues, with the difference varying from N3.55 billion in January 2016 to N45.49 billion in September 2015.

The analysis was contained in the maiden issue of the NEITI Occasional Paper Series, published jointly with BudgIT, a technology-driven, civic-advocacy group on budget and public finance issues.

Titled ‘Review of NNPC’s Monthly Financial and Operations Reports’, the joint publication analyses data publicly disclosed by NNPC covering a 21-month period between January 2015 and September 2016.

Major highlights of the report included a drop by about 27.2 per cent of Nigeria’s crude oil production between January 2015 and September 2016.

The crude oil production fluctuated during the period under review, from 69.49 million barrels, the highest monthly production, recorded in October 2015, to 46.56 million barrels, the lowest recorded in August 2016.

A similar trend was noticeable in terms of average daily production per quarter, as 2.16 million barrels were produced daily on the average in the first quarter of 2015 as against the 1.60 million barrels average daily production per quarter in the third quarter of 2016.

The report, which attributed the fall in oil production to growing vandalism and militancy in the Niger Delta region, said this could impact negatively on the implementation of the current budget, based on assumed daily production of 2.2 million barrels.

Also, the report said average capacity utilisation of the four refineries in Port Harcourt, Warri and Kaduna in the 21 months period was about 8.55 per cent.

In seven out of the 21 months under review, the report said the refineries did not process any volume of crude oil, with consolidated capacity utilisation of the refineries put at above 20 per cent only in August 2015 (24.08%).

Comparatively, the report described Kaduna refinery as “the poorest performer”, and the Port Harcourt refinery the best.

The report also reveals that out of the 245.48 million barrels received by NNPC for domestic supply in 21 months, only 24.78 million barrels were delivered to the refineries for processing, amounting to only 10.06 per cent of total allocation for domestic consumption.

Between January 2015 and September 2016, the report said total crude oil lifted and utilized came to 1.28 trillion barrels, out of which international oil companies and independents lifted 809.98 million barrels.

Government lifted 441.37million barrels while those with alternative financing arrangements lifted 30.15 million barrels, with total value of the liftings for the period put at about $61.17 billion.

Out of the figure, government, IOCs and independents, and alternative funders lifted crude valued at $20.9billion, $38.78 billion and $1.5 billion respectively, with only 9.74 per cent of the crude lifted by NNPC for domestic crude delivered to the refineries.

In terms of refined petroleum products, the report said about 24.24 million litres of petrol was sold daily within the period under review, with daily average sales of petrol fluctuating between 15.23 million litres in September 2015 and 35.09 million litres in May 2016.

The daily average sales for diesel and kerosene came to 1.06 million litres and 3.12 million litres respectively.

The Executive Secretary of NEITI, Waziri Adio, commended the NNPC for providing up-to-date information to Nigerians on the state of the country’s petroleum sector through the monthly financial and operational reports published since August 2015.

He however called on NNPC to improve on its self-declared commitments to openness, transparency, and accountability.