31 December 2015, Sweetcrude, Abuja – The Nigerian National Petroleum Corporation, NNPC, has disclosed that the country lost N56.68 billion to pipeline vandalisation, crude oil and petroleum products theft between January and November 2015.
The NNPC, in its Monthly Financial and Operations Report for November 2015, stated that in the period under review, a total of 2,447 vandalised points were recorded, resulting in a total loss of 637,550 cubic metres of crude oil and products valued at N56.68 billon.
According to NNPC, the loss to vandalism and theft, as well as to the decline in the prices of crude oil in the international market had put it at a disadvantaged market position.
In addition, the report said, “Local operational challenges such as refinery capacity below commercial threshold due to prolonged Turn Around Maintenance (TAM) issues and pipeline vandalism and products losses have also continued to cost the NNPC huge amount of money.
Despite the challenges, the NNPC stated that it would remain resolute in its determination to survive, grow and consolidate on efforts to move the industry forward for the benefit of industry stakeholders and all Nigerians alike.
To this end, the NNPC explained that its leadership had taken bold steps to address the Corporation key business and operational challenges through the ‘20 fixes initiatives’.
The initiatives, according to the NNPC, simply seek to grow upstream production, resolve the complex issues in downstream operations, increase efficiency and push for improved operational and financial performance among others.
It said, “The following factors will be the key determinants for driving change for the Corporation: The need to carry out a holistic reform of the refineries in order to put the assets back on the track of profitability. A 90 day program is currently ongoing to reassess/resuscitate the refineries.
“Secondly, a comprehensive reform of the pipeline security situation will unlock several industry upsides which include improved upstream oil production due to reduced pipeline disruptions, improved refinery utilization due to increased crude oil feed from restored pipelines, and reduction of crude/product losses.”
The NNPC reiterated its commitment to drive a fundamental change in its performance in order to improve profitability, accountability, transparency & focus, adding that a change in organizational set up will be required in achieving this aspiration.
It said, “Consequently the new NNPC leadership team is committed in ensuring a fit-for-purpose organization aligned with NNPC’s aspiration; this will be achieved by restructuring the corporation into autonomous entities that will enable a substantive step change towards the desired outcome.
“Accordingly, the restructured NNPC will be composed of four autonomous business units namely – Upstream, Downstream, Refineries, Gas & Power and supported by a lean Group headquarter (HQ). Non-Core assets will be ring-fence in a Ventures unit.
“NNPC’s commitment to guarantee petroleum products supply and availability at all times in particular the yuletide period, remained uncompromisingly robust. NNPC has over the past few weeks supplied over one billion litres of petroleum products to the domestic market.
“In addition we have rolled out a strategy for every one of our 513 NNPC Retail outlets nationwide to have products at all times and most mega stations will adopt a 24hours operation model where the security situation allows.
“In the same vein, NNPC has achieved an improved Gas supply to the domestic market to support power generation nationwide.”