In line with its commitment to transparency, probity and accountability, the NNPC has recently released its Monthly Financial and Operations Report for August 2015. A summary review of some of the major headings of the full 28 page report is presented below:

2.1 National Crude Oil & Condensate Production
A total of 67.49 million barrels of crude oil and condensate was produced for the month of July 2015 translating to an average daily production of 2.177m bbls.
Observation: There was a 3.7% increase in average daily production of Crude Oil for the month of July compared to the average 2.099mbbls over the previous six months.

2.2 National Gas Production & Utilization
A total amount of 255 billion standard cubic feet (BCF) of natural gas was produced for the month of July 2015. 57% of the gas produced was commercialized while the balance of 43% was either re-injected, used as upstream fuel gas or flared.
Observation: Gas commercialization increased by 21% to 35.4bcf in July from the previous average of 29.1bcf. Gas flaring also reduced from the average flare rate of 9.3% to 7.3%.

2.3.1 Crude Oil & Condensate (FG Lifting)
A total of 63.7mbbls of crude oil and condensate was lifted in the month of July 2015 by all parties. Out of this volume, 25.2mbbls was lifted for and on behalf of the Federal government of Nigeria comprising 17.4mbbls lifted on the account of NNPC and 7.8mbbls lifted on the account of FIRS.
Observation 1: There was a 7.2% increase in FG lifting for the month of July compared to the average of 23.5mbbls over the previous 6 months.
Observation 2: From 2.1 above, the NNPC claims a total production level 67.49mbbls but then claims in this section a total lifting of 63.7mbbls. I have no idea where the balance of 3.79mbbls that was produced but not lifted went to.
Observation 3: I observed that over the previous 6 months, FG lifting was done in 3 accounts (NNPC, DPR and FIRS). But for the month of July, no crude was lifted in DPR account, thus causing the lifting on FIRS account to increase by 75% to 7.8mbbls against the previous monthly average of 4.45mbbls. It is not clear if this is a positive development or not.

3.1 Refineries Operation
Total crude processed by the three refineries for the month of August was 3,322,510 bbls which translates to a combined average capacity utilization of 10.04%. The capacity utilization for the month of August for each of the refineries were: WRPC (26.64%), PHRC (29.68%), KRPC (10.50%).
Observation 1: The NNPC's claim that the combined average capacity utilization of all refineries was 10.04% is questionable. A look at the capacity utilization of each refinery shows a combined average of around 24%. Also, dividing 3.3mbbls by 31 days gives a figure of around 107k barrels per day. This is also around 24% of the combined installed refinery capacity of 445k bbls/day. The previous monthly average capacity utilization was less than 8%.
Observation 2: While most of other sections of the report cover up to July 2015, the report for refinery operations cover up to August 2015.

4.1 Petroleum Products Supply from Domestic Refineries
A total of 116m litres of PMS and 83.8m litres of DPK was produced by the domestic refineries in August 2015 as compared to the previous monthly average of 70m litres and 13m litres respectively. Infact, there was zero DPK production from local refineries between February and June 2015 (5months).

4.2 Downstream Petroleum Product Distribution
A total of 606 million litres of white product was distributed and sold by PPMC in the month of August 2015 comprising of 516m litres of PMS and 83.5m litres of DPK. The previous average monthly distribution of PMS was 587m litres.
Observation: The distribution of 516m litres of PMS for the month of August was 12% lower than the previous monthly average of 587m litres. Yet the product seems to be readily available and at the right price, compared to the previous period.

4.3 Domestic Gas Supply to the Power Sector & Generation
An average of 786mmscfd of gas was delivered to gas fired power plants in the month of July to generate an average power of about 3,489MW compared with the previous average gas supply of 656mmscfd and power generation of 2,843MW.
Observation: There was a 23% increase in power generation from gas fired plants in July, which probably explains the improvement in power supply over that period.

5. Summary of Group Operating Expenditure and Revenue for August 2015
Group operating revenue before subsidy for the month of July and August 2015 were N149.2b and N146.6b respectively against an expenditure of N200.12b and N207.28b for the same periods respectively. This resulted in operating deficits of N51.7b and N60.7b for July and August 2015 respectively.
Observation 1: The main culprit responsible for the NNPC deficit is the PPMC subsidiary. The subsidiary spent an average of N28.6b monthly for subsidy payment and another N8.6b monthly for pipeline repairs/maintenance.
Observation 2: Subsidy payments for the month of July and August was still high just like the previous months, indicating that the government has not yet achieved anything in that regard.

OVERALL IMPRESSION
Over the period of July and August, there was a general improvement on almost all the Key performance Indices which is a positive development. However, the group’s year to date deficit of N378.5b against a budget surplus of N311b is abysmal.

Some terms and abbreviations used in the report were not understood. For instance, it is not clear how the FG treats the crude oil lifting in FIRS and DPR accounts. The report mainly focuses on the crude oil lifted on NNPC account.

It is also not clear why the NNPC allocated to itself 499,767bpd of crude oil for the month of August for domestic products supply, against the standard of 445,000bpd (which is the total installed capacity of domestic refineries).

One would also like to see more information on the Offshore Processing Agreements (OPA). For instance, one would like to know what happens to all the other products from the refining value chain (such as Naphta, Bitumen, Lube Oil, etc). Even for the conventional products like PMS, DPK, AGO, one would like to see the product yield from those contracts to see if the country is getting full value from its crude oil.

All the same, the very idea of providing a monthly report is a welcome development and a sign of transparency & accountability. This will provide relevant stakeholders the information to engage the corporation more constructively.

SOURCE
Find the link to the 28 page full report below:
http://www.nnpcgroup.com/Portals/0/Monthly%20Financial%20and%20Operations%20Data/NNPC%20Monthly%20Financial%20and%20Operations%20Report%20August%202015.pdf.

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Bevista

Interesting indices. All I see is improvements visible ones at that.


Despite the falling oil prices and rise and fall of our economy, the better days are still in sight.

OP, SOURCE OR ADONBILIV

nice

"Hypocrisy is when you support your own criminals(amaechi, atiku, tinubu etc), and when I support my own criminals(mimiko, saraki etc) you begin to condemn me. Is amaechi different from mimiko? We are not ready for change at all in this country". Quote me anywhere

I'm coming back

Ok

Good one from the OP and the analyst. This kind of breakdown will make people to get involve. Tho some of the analyses is still opaque to me, but am still clear on some issues now better than the first one.

Bevista ...how many times have I called you? Once.

OK, run to Shoprite beverage section and take one can of sprite ...I would pay later.

Great job.

Special note: domestic gas supply should be increased. Let NNPC target 900mmscfd by November 2015.

Can we have the reports delivered monthly say at the end of the month?We can do an analysis month-on-month thereafter.For instance the report of October 2015 should be delivered latest 5th of November 2015.

OP,thanks for the breakdown and analysis. I will refer to this as a guide when the next monthly report is released to the public.

Keneking:
Great job.

Special note: domestic gas supply should be increased. Let NNPC target 900mmscfd by November 2015.

Can we have the reports delivered monthly say at the end of the month. We can do an analysis month-on-month thereafter. For instance the report of October 2015 should be delivered latest 5th of November 2015.

The new NNPC boss has made a commitment to produce the report on a monthly basis, so we'll have to wait and see if he keeps to his words.

Thank u OP for the break down, though I am still not conversant wit some of the issues. Anyway, I find it very understandable and hope you would break it down when next there is another report

gwales:
Thank u OP for the break down, though I am still not conversant wit some of the issues. Anyway, I find it very understandable and hope you would break it down when next there is another report

If there are any clarifications you seek or specific questions you would like to ask, then feel free to drop it and we'll make effort to provide an appropriate answer.

Executive summary pls

omowolewa:
Executive summary pls

Find below the link to the one-page Executive Summary which was already posted on FP. This post was meant to provide more analysis based on the full 28 page report.

http://www.newsheadlines.com.ng/latest-news/2015/10/09/nnpc-releases-first-monthly-oil-and-gas-report/

juju

yanabasee:
OP, SOURCE OR ADONBILIV

Source is the NNPC full 28 page report. Link to the report is there in the post.

Bevista:
Source is the NNPC full 28 page report. Link to the report is there in the post.

Lemme go check on it... Be right back! To check on your review!