Nigeria earns N724bn from domestic crude oil sales

*Crude oil tanker.

*Crude oil tanker.

Ike Amos

23 October 2015, Sweetcrude, Abuja – Nigeria earned N723.82 billion from domestic crude oil and gas sales between January and August 2015, the Nigerian national petroleum Corporation (NNPC) has revealed.

The NNPC in its Financial and Operations Report for the month of August, stated that the country also earned $3.423 billion, about N684.6 billion from the export of crude oil and gas.

The NNPC put domestic crude sales proceed due the country at N1.164 trillion; N723.824 billion was received, while N774.47 billion was remitted to the Federation Account Allocation Committee (FAAC), inclusive of a debt repayment of N50.64 billion.

The country spent N231.04 billion on subsidy; N4.17 billion and N41.65 billion was incurred as crude and petroleum product losses respectively, while repairs and management cost gulped N69.41 billion.

In general, the NNPC stated that the country earned $25.105 billion, about N5.021 trillion from the sale of crude oil between January and July 2015.

A breakdown of the figure, showed that the Federal Inland Revenue Service, FIRS, and the Department for Petroleum Resources, DPR, earned $1.966 billion, about N393.2 billion and $229.668 million, about N45.93 billion respectively from Production Sharing Contract revenue.

In addition, the NNPC earned $7.156 billion, about N1.43 trillion in the period under review, while the amount accrued to the Federal Government was $9.351 billion, about N1.87 trillion. Oil companies, including the Nigerian Petroleum Development Company, NPDC, earned $15.077 billion, about N3.02 trillion, while Alternative Finance received $676.287 million, about N135.257 billion.

The report said, “A total volume of 63.7 million barrels of crude oil and condensate was lifted in the month of July 2015 by all parties. Out of this volume, 25.2 million barrels was lifted for and on behalf of the Federal government of Nigeria comprising of 17.4 million barrels lifted on the account of NNPC and 7.8 million barrels lifted on the account of FIRS.

“The 17.4 million barrels lifted on the account of NNPC in July comprises 15.4 and 1.9 million barrels for the domestic and export markets respectively. At an average oil price of $51.97 per barrel and exchange rate of N195.95 to a dollar, the domestic crude oil lifted by NNPC is valued at $805.22 million or a naira equivalent of N157.782 billion for the period.

“The remaining crude oil lifted for export was valued at $108,916,802.23 at an average price of $56.76 per barrel. The total value of crude oil lifted on the account of NNPC in July was thus $914.136 million.

“For the period from January to July 2015, a total volume of 439 million barrels of crude oil and condensate was lifted by all parties.”

The NNPC identified incessant pipelines breakages, crude oil and product theft and losses, Poorly negotiated legacy contracts have contributed adversely to the profitability of the corporation as major challenges that had impacted negatively on its operations in the period under review.

It also identified low capacity utilization of the country’s refineries, unrealized subsidy claims of about N231 billion for 2015 and inefficient business models as other challenges confronting it.

To this end, the NNPC said, “Consequently, NNPC is embarking on a Change agenda termed the ‘20 Fixes’ which identifies 20 critical issues that need to be addressed in order to re-position the Corporation on the path of profitability.”

Some of the fixes include: reducing and auditing its costs; restructuring its corporate centre and staffing; renegotiating existing contracts including production sharing contracts and streamlining subsidy management among others.

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