NNPC tops losers’ chart as refineries record zero production

Tough times for Nigeria’s troubled oil and gas sector are showing no signs of easing off as the Nigerian National Petroleum Corporation (NNPC) has claimed the top most position among market losers in the 2015 financial year.

BusinessDay findings from NNPC show that the Corporation’s corporate headquarters emerged as its biggest loss-making unit with a net loss of N141 billion in 2015, even as a single drop of crude was not refined by any of Nigeria’s existing refineries in the month of October.

Also in the month of September, only marginal refining activities were carried out in the country, with the Port Harcourt refinery achieving a negligible capacity utilisation of 4.2 percent.

On their part, the Kaduna and Warri refineries remained totally shut down for the period.

To further underscore the sub-optimal condition of Nigerian refineries, of the 741 million litres of petroleum products consumed by Nigerians in October, about 638.5 litres were imported through Offshore Processing Agreements (OPAs) and only 102.5 million litres were procured through domestic refining.

Among the subsidiaries of NNPC, the Pipelines and Products Marketing Company (PPMC) and the Nigerian Petroleum Development Company (NPDC) were the biggest losers in October, said Stanley Achonu, an official of NNPC, who could not immediately provide specific details on the loss status of the two companies.

He however stressed that the Nigerian Gas Company (NGC) and NNPC Retail were the only units within the Corporation that were currently making profit, and that in the upstream, a profit of about N28 billion was recorded between the months of January and October 2015.

On the issue of production ratio, Achonu said the Joint Venture (JV) contracts were lagging behind the Production Sharing Agreements (PSAs), which contributed about 41 percent as compared with the 31.27 percent output in commercial oil production from the JVs within the period under review.

Available information also shows that in the month of September, about $3.12 billion was generated from crude oil production activities, with $900 million coming from NNPC domestic sales and $300 million from its export receipts.

Also, the Federal Inland Revenue Service (FIRS) raked in $119 million from statutory industry taxation, while the International Oil Companies (IOCs) and other smaller key players within the sector made up for the remaining sum.

In terms of domestic earnings from downstream sales in the month of October, the Corporation made N60.15 billion from premium motor spirit (PMS), N2.15 billion from diesel and only N0.9 billion from kerosene.

Although NNPC’s payments into the Federation Accounts Allocation Committee (FAAC) increased from N73 billion to N88 billion between September and October, no payment was made from its dollar accounts.

The Corporation said that its dollar proceeds were used within the period for the funding of subsisting JV contracts.