NEITI: Federation Earned $61.2bn from 1.28bn Barrels of Oil in 21 Months

Says NNPC recorded N419bn operational loss in 19 months
Chineme Okafor in Abuja

The Nigeria Extractive Industries Transparency Initiative (NEITI) has put Nigeria’s aggregate crude oil production and earnings within the last 21 months when the Nigerian National Petroleum Corporation (NNPC) began to publish its monthly production and financial records, at 1.28 billion barrels and $61.17 billion, respectively.

NEITI said it used the aggregates from NNPC’s monthly production and financial records for the period to arrive at the 1.28 billion barrels of crude oil that was produced, of which the international oil companies (IOCs) and independents lifted 809.98 million barrels, the federal government lifted 441.37 million barrels while alternative financing (AFs) arrangements lifted 30.15 million barrels.

It said in a summary on its latest accountability publication titled: “Occasional Paper Series, A Review of NNPC’s Financial and Operational Reports;” released yesterday in Abuja that of the $61.17 billion that accrued as revenue over the 21-month period, the government, IOCs, independents and AFs earned $20.9 billion, $38.78 billion and $1.5 billion, respectively.

The NEITI publication was produced with BudgIT, a leading Nigerian technology-driven, civic-advocacy group on budget and public finance issues.
NEITI further stated that NNPC recorded a trading deficit of N418.97 billion in 19 months, and profit of N7.87 billion in only two months.

It said crude oil production and financial data publicly disclosed by NNPC over the 21-month period, starting from January 2015 to September 2016, showed that only 9.74 per cent of the crude lifted by NNPC for domestic crude was delivered to the refineries.

It explained that crude oil production fluctuated in the period under review, with the highest production per month recorded in October 2015 (69.49 million barrels) and the lowest recorded in August 2016 (46.56 million barrels).
“When the production figures for January 2015 (68.07 million barrels) and September 2016 (49.53 million barrels) are compared, there was a decline in monthly production by 27.23 per cent.

“The same trend was noticeable in terms of average daily production per quarter, as 2.16 million barrels were produced daily on the average in the first quarter of 2015 as against the 1.60 million barrels average daily production per quarter in the third quarter of 2016,” it added.

It noted that the fall in oil production was largely attributed to growing vandalism and militancy in the Niger Delta region. However, production fluctuations were noticeable even before the outset of militant activities, NEITI added.

On NNPC’s profit and loss account, the report stated: “For the 21 months under review, the NNPC group made a cumulative loss of N418.97 billion in 19 months. Volatility was also noticeable in the group’s losses, ranging from N3.55 billion in January 2016 to N45.49 billion in September 2015.

“The group made a profit only in two of the 21 months covered by the NNPC monthly reports under review. This was in January 2015 when the group made a profit of N7.6 billion and in May 2016 when it made a profit of N0.27 billion, with total profits in 21 months coming to N7.87 billion, as against the loss of N418.97 billion, with the net loss coming to N411.1 billion.”

NEITI explained that between January 2015 and September 2016, the average capacity utilisation of Nigeria’s refineries in Port Harcourt, Warri and Kaduna was 8.55 per cent, adding: “The refineries did not process crude oil at all in seven out of the 21 months under review.”
It said the Kaduna refinery was the poorest performer while the Port Harcourt refinery was the best performer.

NEITI’s Executive Secretary, Waziri Adio, however, said in his reaction to the data that the NNPC has with the monthly reports voluntarily embraced transparency, a virtue he said was critical to the efficiency of the country’s oil industry.
Adio said: “What NNPC has done with its monthly reports could be termed a sea-change. From being the poster boy for opacity, NNPC is voluntarily embracing openness and providing near real-time information about the state of play of our oil and gas sector today.

“This is commendable, but also deserving of close and critical examination. For example, what do the reports, looked at together, tell us about our petroleum sector today and what is the implication of that for the public, for public finance and for petroleum sector reforms? That is the rationale for this special report.”