… Remits N153.01 bn in January 2019
Nigerian National Petroleum Corporation (NNPC) says it paid out some N1.564 trillion to government and operating partners between January 2018 and January 2019, but did not specify whether the payment is from its operations profit or part of the revenues from the nation’s equity oil from industry operations.
The corporation represents government’s interest in the commercial operations of all players in nation’s oil and gas exploration, production and processing business. Primarily, the corporation is various production agreements with different asset operators in the petroleum industry.
The corporation also stated in its monthly financial records published weekend that it transferred N153.01 billion into the Federation Account in January this year following more than expected upstream earnings boosted by production upside in the operations of Nigerian Petroleum Development Company (NPDC).
Out of the payments made by the corporation in 2018, N905.45 billion was remitted to the Federation Account while N658.66 was paid to operating partners to meet equity funding for joint venture operations.
The payments to government and joint venture operators featured in the corporation’s Naira payments within the period. They do not cover overhead and sundry costs run by the corporation with the year.
The corporation also posted bullish revenue performance for the first month of the year, declaring positive business balance sheet of N15.04 billion for January 2019, a 24 per cent increase from the N12.13 billion posted in December 2018.
NNPC Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, said the corporation’s upstream activities turned in more than expected cash despite reduced operational activities in the month.
The Oracle Today reports that exploration and production unit of NNPC was in position to make greater cash returns following the rising prices of crude oil in the export market, explaining the greater revenue from NPDC despite reduction in business activities as reported by the corporation.
Revenue for the corporation also flowed from its trading units: the Petroleum Products Marketing Company (PPMC), and Duke Oil. However, NNPC reported that earnings from the two trading arms were hampered by high operating cost.
The NNPC declared total oil and gas export earnings of $381.70 million (N137.412 billion) in January, up from $345.68 (N124.444 billion) in December, 2018.
NNPC stated in the report that revenue contributions from crude oil amounted to $269.43 million, gas revenue came to $111.75, while miscellaneous income from industry operations was $0.52 million.
“Within the period under focus, NNPC transferred N153.01 billion into the Federation Account, while cumulatively, from January 2018 to January 2019, Federation and JV received N905.45 billion and N658.66 billion respectively, under the column of Naira Payments to the Federation Accounts,” the report stated.
No income was declared for the corporation’s midstream and downstream marketing operations. The Port Harcourt Refining Company (PHRC), Rivers State; Warri Refinery and Petrochemical Company (WRPC) in Delta State; and the Kaduna Refining and Petrochemical Company (KRPC), all operated by NNPC are currently moribund.
The domestic fuel market where NNPC holds supply monopoly is opaque and runs on controversial annual subsidy budget of N1.4 trillion, according to official estimates; but the costs and margin recovered from the subsidy budget are hardly declared in financial statements of the corporation.
The corporation stated in its January report that it supplied about 2.0 billion litres of petrol to the market through the crude-for-product swap arrangement in January, up from about 1.8 billion litres supplied in December, 2018.
It pointed at the challenge of fuel distribution in the country to be mainly pipeline vandalism by thieves that thrive on sale of stolen petroleum products.
The corporation reported 230 pipeline breaks in the month, down by 11 per cent from the 264 vandalized points recorded in December, 2018.
Geographical mapping of distribution pipeline breaks in January showed drastic drop in cases of pipeline hacking in the Southeast and Southsouth zones of the country, and uptick in the Southwest areas of the country.
According to NNPC, Mosimi-Ibadan pipeline suffered 67 vandalized points or 29 percent of the total; Ibadan-Ilorin pipeline suffered 62 vandalized points or 27 percent; while and Aba-Enugu pipeline suffered 30 vandalized points or 13 percent of the total.
The Warri-River Niger axis of the distribution pipeline also accounted for 10 per cent of total vandalized points, while other locations accounted for the remaining 21 per cent of the pipeline breaks.