7 key highlights from the latest NNPC's financial and operations report

Mele Kyari [NNPC]
  • NNPC posted a higher trading surplus of N6.3 billion ($17.41 million) for the period.
  • The state-owned oil firm also recorded rises in cases of oil pipeline vandalism across the country.

The Nigerian National Petroleum Corporation (NNPC) has released its latest Monthly Financial and Operations Report (MFOR) for May 2019.

For the month, the state-owned oil firm recorded higher trading surplus of N6.3 billion ($17.41 million) compared to the N5.6 billion surplus posted in April 2019.

According to the report, the rise was attributable to the 11% increase in Gas & Power surplus as compared to previous performance as well as the huge surplus recorded in the downstream sector which comprises of its Strategic Business Units (SBUs) like Shipping, NPSC, Retail, PPMC, and Duke Oil Incorporated.

These SBUs cover the entire spectrum of the country's oil industry operations such as exploration and production, gas development, refining, distribution, petrochemicals, engineering, and commercial investments.

Why this matters

The oil economy is important as the food we eat. It constitutes about 90% of Nigeria's export revenue and the country's cash cow.

In 2018, total oil revenue rose by 129% to N9.4 trillion while non-oil revenue gulped N3.9 trillion for the economy, according to the CBN's economic data.

With this figure, oil remains the backbone of the Nigerian economy.

Business Insider SSA looks at seven key highlights from the NNPC's May 2019 financial report:

  • Total crude oil production in Nigeria decreased by 2.75 million barrel (mb) or 4.38% to average approximately 1.94 mb/d in April 2019.
  • Production was disrupted by shut-in of the Trans Ramos Pipeline (TRP) for almost the whole of April due to leaks in the creek crossing around the Odimodi area within the Forcados terminal.

Interruption also occurred at Egina, Brass, Bonny, Oyo and some other terminals due to maintenance; technical issues; power outages and gas leakages.

  • National Gas production in the month decreased by 12.29% at 223.73 BCF (billion cubic feet) compared to the output in April 2019; translating to an average daily production of 7,430.96 mmscfd (million standard cubic feet per day). The daily average natural gas supply to gas power plants increased by 4.6% to 761.46 mmscfd, equivalent to power generation of 2,958 MW.
  • Also, a total of 60 pipeline points were vandalised which represents a remarkable 52% decrease from the 125 points vandalised in April 2019.
  • ATC-Mosimi and Ibadan-Ilorin routes accounted for 38% and 23% respectively and other locations the remaining 39% of the total breaks.
  • In May 2019, the three refineries processed 32,967MT of crude to produce 21,347 MT for the month as against zero quantity processed in April 2019. Only Warri Refining and Petrochemical Company (WRPC) produced the Finished Petroleum Products of 21,347 MT in May 2019
  • Group operating revenue for the month of May 2019 hiked by 8.87% at N578.35 billion; an increase of N47.13 billion over the previous month’s performance. In the same vein, expenditure for the month rose by 8.11% or N46.40 billion and stood at N572.02 billion in the current month.  

Last week, the Nigerian government awarded oil lifting licenses to 15 firms for a period of one year.

The agreement was under the 2019/2020 Direct Sale of Crude Oil and Direct Purchase of Petroleum Products (DSDP) of 14 billion litres.

The essence of the DSDP is to ensure sustained product supply in the country.

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