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NNPC Makes N281.7bn, Spends N238.9bn

…Transferred N42.8bn to Federation Account in January

Nigerian National Petroleum Corporation (NNPC) says it made gross receipts of N281,745,463,616.80 ($345,683,662.11) from the crude and export sales in December 2018 but eventually remitted N42,829,592,675.94 into the federation account shared in January 2019.

According to a senior Federation Account Allocation Committee (FAAC) source, the receipts were made up of gross oil and gas export of N105,779,200,605.66 and another N175,966,263,011.14 from domestic oil and gas sales.

Of the total income, however, NNPC paid N110,087,371,214.23 to its joint venture (JV) partners for cost their cost recovery and spent another N50,831,456,510.84 as subsidy.

In March 2018, NNPC Group Managing Director, Dr Maikanti Baru disclosed that the corporation has brought down the cost of producing a barrel of crude oil to $20 and that it was working on further reducing the cost to $15 per barrel.

Globally, however, the cost of producing an additional barrel of oil is lowest in Saudi Arabia at US$8.98 per barrel with the highest being the U K at US$44.33. In Canada, it’s $26.24.

The cost is also low in Iran and Iraq ($10), but higher than $19 in Russia and $23.33 in the U.S. There isn’t one generally acceptable estimate of these costs. More recent estimates put the cost of production per barrel to exceed $60 dollars in the United States.

NNPC in its presentation to FAAC meeting of 24th January, 2019 also reported that it withheld N2.462 billion as Strategic Holding Cost even though it withheld N1.724 billion for the same purpose in December 2018 when it’s income was 22.5 per cent higher.

Other deductions include pipeline management cost (N3.666 billion), pipeline, operations repair and maintenance cost (N8.044 billion) making a total of N13.874 billion.

In the same vein, NNPC kept N5.067 to augment for crude oil and product losses thus bring total deductions to N174.793 billion according to the document.

In the report, the corporation spent N16.844 billion on “government priority projects, paid N20.678 million to the Department of Petroleum Resources (DPR) as royalty and N26.599 million to FIRS as taxes.

The corporation, which reported on Tuesday that it made $5.97 billion from its crude and gas export sales in the last one year said it recorded 64.57 per cent decline in crude oil export during a month, 70 per cent drop in lifting and 21 per cent price decrease.

“The low PMS under-recovery is due to decline in international crude oil prices and freight rate in November 2018, which pushed pms landing cost down.

The corporation also stated that it recovered N23.695 billion of the outstanding N31.593 billion pms arrears during the month, leaving a balance of N7.898 billion.

SOURCE: tribune