Monday, 12 October 2015

NNPC Records N378bn Loss In 8 Months

The Nigerian National Petroleum Corporation, NNPC, has announced a loss of N378.49 billion in its operations for the first eight months of the year.

Ibe KachikwuOne of NNPC’s subsidiaries, the Products and Pipeline Marketing Company Limited, PPMC, accounted for majority of the losses, as it spent over N300 billion on subsidy and in the repairs and management of its pipelines between January and August.

In the figures presented by NNPC’s Monthly Financial and Operations Report for August, obtained over the weekend, NNPC posted a loss of N60.669 billion and N51.714 billion for the months of July and August, respectively.

The loss resulted from expenses being higher than its revenue in the period under review.

Specifically, NNPC recorded a total revenue of N1.17 trillion, lower than an expenditure of N1.55 trillion, leaving a deficit of N378.49 billion.

In the month of July, NNPC recorded revenue of N149.198 billion and expenses of N200.126 billion, while in August, the group posted N146.617 billion revenue and expenses of N207.287 billion.

Refineries’ loss

The heavy losses were as a result of the lacklustre financial performance of majority of the NNPC subsidiaries in the eight-month period, especially the refineries and retail subsidiaries.

Particularly, Kaduna, Port Harcourt and Warri refineries companies posted a combined loss of N48.92 billion, while NNPC Retail and PPMC recorded a combined loss of N275.16 billion.

Further analysis of the operation of strategic business units showed that Kaduna Refinery and Petrochemical Company Limited posted a loss of N21.90 billion; Port Harcourt Refining Company recorded a loss of N15.1 billion, while Warri Refinery and Petrochemical Company lost N12.62 billion.

NNPC Retail posted a loss of N3.679 billion, while the PPMC recorded N278.837 billion loss.  On the other hand, Nigerian Petroleum Development Company, NPDC; Integrated Data Services Limited, IDSL; Nigeria Engineering and Technical Company Limited, NETCO and Nigerian Gas Company, NGC, posted profits of N50.995 billion, N2.934 billion, N544 million and N19.239 billion, respectively.

In its explanations, NNPC stated that 73 percent year-to-date NNPC deficit of N378 billion was accounted for by the PPMC deficit of N278 billion.

It disclosed that PPMC deficit mainly comprised claimable subsidy of N231 billion, which represented 82 percent of the subsidiaries’ deficit and its claimable pipeline repairs/management cost of N69 billion and also crude product losses of N45 billion due to vandalized pipelines.

NNPC further stated that N723.82 billion for domestic crude oil and gas sales proceeds was paid to the Federation Account from January to August.

Revenue from oil, gas

It also stated that from January to July, a total volume of 439 million barrels of crude oil and condensate were lifted by all parties.

The report said: “Total US dollar payment to the Federation from sales of export crude oil, gas and NLNG feedstock for the month of August was $225.7 million.

“Crude oil export sales contributed $108.9 million, that is 48 percent of the dollar payment, compared with 76 percent contribution in previous month of July, while export gas sales and NLNG feedstock accounted for $99.65 million, that is 44 percent contribution compared with 23.7 percent contribution in the prior month of July.

“The remaining $16.8 million was attributable to other dollar denominated receipts by the corporation. A total of $607.8 million has been paid so far to FAAC this year from sales of export oil and gas.”