chosen04:
With respect to the recent Budget presentation by the Nigerian Junta Head, Gen. Mohammed Buhari for the 2016 fiscal year, the Coodinator of All Coordinators (COC) and the Spokesman of Indigenous People Of Biafra (IPOB), went on his facebook page to deconstruct Buhari's lies.

Excerpt: . . DECONSTRUCTING BUHARI'S 2016 BUDGET OF LIES & DECEIT----Part-1


QUESTIONS BY IPOB:

3) Can Buhari and his gangs explain what happened to the difference between the 2016 Gross earning and 2016 Expected revenue which stands at N5.2828 trillion? If N820 billion (13.44% of Gross earning) is the net, then is N5.2828 trillion (86.56% of Gross earning) the cost of production for the 803 million barrels?

IPOB is asking Buhari and his gangs!!! Source: www.thebiafratimes.co/2015/12/deconstructing-buharis-2016-budget-of.html

tuale4u:

The IPOB guy did not understand the budget. let me help him explain. I work in oil company.
1. The Federal government budget is the Budget of the federal government alone. Not the Budget of the country.
Thus from the Nigeria sharing formula, the Federal government takes about 54% of the total oil revenue accruing to the country (Nigeria Federation).
2. Most of the oil production in Nigeria are JV and PSC. Using the JV template, Nigeria (the federation not Federal govt) only owns 60% of the oil produced and the Oil companies owns the remaining 40% of the oil produced per day .
thus the 2.2 million per day, only 0.6*2.2million=1.32million belong to Nigeria (The federation).
thus the 820billion naira is only the 54% for the federal government of the total oil revenue accruing to the government from crude oil sales.
Federal govt share (Potential) = 0.54*1.32million=712,800 per day.
3. The actual average production per day is about 80% of the Potential production
this is because of 20% shutdown for maintenance, unplanned shut downs, pipeline vandalisation etc.
Thus the Federal govt actual average production per day = 0.8*712,800=570,240.
4. Today the average cost of production per barrel in Nigeria is about $18 per barrel.
Actually some onshore field cost are as low as $10 per barrel while some deep offshore and shallow offshore cost are as high as $25 dollar per barrel. Today more than 60% of Nigeria crude are from Offshore. thus using an average cost of $18 per barrel is realistic.
Thus out of the $38 dollar per barrel price of oil, the net revenue to the govt is about $20 per barrel.
thus the expected revenue to federal government from direct sales of Crude oil in 2016 is:
= $20 *199naira/1$ *570240*366*billion/1000000000= 830billion naira
From my estimation the Federal government expected revenue from direct oil sales is about 830billion naira which is very close to 820 billion naira estimated from federal government.
However, this is not all the federal get from having oil in this country. The oil companies pay company tax in hunderds of billion of naira.
But the govt choose to call it company tax because other companies that are not oil companies pay tax too. However the company Tax of oil companies is about 85% of their profit. Thus of the about 1.5 trillion naira expected revenue from company tax, more than 50% of it are coming from oil companies.

quid:

So this is how you psyche yourself up to believe financial rumors.

tuale4u:


The IPOB guy did not understand the budget. let me help him explain. I work in oil company.

1. The Federal government budget is the Budget of the federal government alone. Not the Budget of the country.
Thus from the Nigeria sharing formula, the Federal government takes about 54% of the total oil revenue accruing to the country (Nigeria Federation).

2. Most of the oil production in Nigeria are JV and PSC. Using the JV template, Nigeria (the federation not Federal govt) only owns 60% of the oil produced and the Oil companies owns the remaining 40% of the oil produced per day .

thus the 2.2 million per day, only 0.6*2.2million=1.32million belong to Nigeria (The federation).
thus the 820billion naira is only the 54% for the federal government of the total oil revenue accruing to the government from crude oil sales.

Federal govt share (Potential) = 0.54*1.32million=712,800 per day.

3. The actual average production per day is about 80% of the Potential production
this is because of 20% shutdown for maintenance, unplanned shut downs, pipeline vandalisation etc.

Thus the Federal govt actual average production per day = 0.8*712,800=570,240.

4. Today the average cost of production per barrel in Nigeria is about $18 per barrel.
Actually some onshore field cost are as low as $10 per barrel while some deep offshore and shallow offshore cost are as high as $25 dollar per barrel. Today more than 60% of Nigeria crude are from Offshore. thus using an average cost of $18 per barrel is realistic.

Thus out of the $38 dollar per barrel price of oil, the net revenue to the govt is about $20 per barrel.

thus the expected revenue to federal government from direct sales of Crude oil in 2016 is:

= $20 *199naira/1$ *570240*366*billion/1000000000= 830billion naira


From my estimation the Federal government expected revenue from direct oil sales is about 830billion naira which is very close to 820 billion naira estimated from federal government.


However, this is not all the federal get from having oil in this country. The oil companies pay company tax in hunderds of billion of naira.
But the govt choose to call it company tax because other companies that are not oil companies pay tax too. However the company Tax of oil companies is about 85% of their profit. Thus of the about 1.5 trillion naira expected revenue from Company Income Tax (CIT), Value Added Tax (VAT), Customs and Excise duties, and Federation Account levies, about 50% of it are coming from oil companies.

tuale4u:


cant you be objective. most everything be emotional and sentimental.

quid:

Stop using "objectivity" to cajole yourself.
Wake up . . .LOL

tuale4u:


cant you be objective. most everything be emotional and sentimental.

tuale4u:

Can you cleary point out where I am completely wrong in my estimation?
I am willing to learn from you as long as it is factual and not emotional.

ayokellany:


Please learn to respond to only intelligent comment on NL, it is not everyone on NL that is here to learn or as the capability to.

mrvitalis:

Sir I love ur explanation. .. But there were no mention of our NLNG sales... That's should run into billions of dollars too

tuale4u:


The IPOB guy did not understand the budget. let me help him explain. I work in oil company.

1. The Federal government budget is the Budget of the federal government alone. Not the Budget of the country.
Thus from the Nigeria sharing formula, the Federal government takes about 54% of the total oil revenue accruing to the country (Nigeria Federation).

2. Most of the oil production in Nigeria are JV and PSC. Using the JV template, Nigeria (the federation not Federal govt) only owns 60% of the oil produced and the Oil companies owns the remaining 40% of the oil produced per day .

thus the 2.2 million per day, only 0.6*2.2million=1.32million belong to Nigeria (The federation).

Federal govt share (Potential) = 0.54*1.32million=712,800 per day.

3. The actual average production per day is about 80% of the Potential production
this is because of 20% shutdown for maintenance, unplanned shut downs, pipeline vandalisation etc.

Thus the Federal govt actual average production per day = 0.8*712,800=570,240.

4. Today the average cost of production per barrel in Nigeria is about $18 per barrel.
Actually some onshore field cost are as low as $10 per barrel while some deep offshore and shallow offshore cost are as high as $25 dollar per barrel. Today more than 60% of Nigeria crude are from Offshore. thus using an average cost of $18 per barrel is realistic.

Thus out of the $38 dollar per barrel price of oil, the net revenue to the govt is about $20 per barrel.

thus the expected revenue to federal government from direct sales of Crude oil in 2016 is:

= $20 *199naira/1$ *570240*366*billion/1000000000= 830billion naira


From my estimation the Federal government expected revenue from direct oil sales is about 830billion naira which is very close to 820 billion naira estimated from federal government.


However, this is not all the federal govt get from having oil in this country. The oil companies pay company tax in hunderds of billion of naira.
But the govt choose to call it company tax because other companies that are not oil companies pay tax too. However the company Tax of oil companies is about 85% of their profit. Thus of the about 1.5 trillion naira expected revenue from Company Income Tax (CIT), Value Added Tax (VAT), Customs and Excise duties, and Federation Account levies, about 50% of it are coming from oil companies.

ziccoit:
Good job. In summary, oil contributes little to the budget. We should move away from oil things.

Jokay07:
Op, You even have time to explain. You should have allowed them to swim in the pool of ignorance before you rescue them with this on point explanation. I saw the thread too, but when I discovered that it was composed from IPOB section, I just close it and skip to the next topic.
You are just wasting your time because these people won't understand what you meant by JV and PSC.
The time and effort you used to explain this thing to this bunch of dullards could have been used to do something more profitable.

porka:


But you people did everything humanly possible to avoid going detailed like this previously.

When they told you about shut-ins then your response was angrily largely centred on how the past administrations encouraged bunkering.

Even when told that the 60% Joint Ventures production costs must be funded by Nigeria you violently shouted in anger to show your disdain for thorough scrutiny.

Now that your people are at the other end, it's most convenient for you to start 'displaying your expertise' in oil and gas matters.

Everyone is now a 'PhD holder' and an industry expert when Buhari's calculations on mega billions have all but failed to yield anything.

By next budget, we are expecting more 'tax and audit' experts to display their newly acquired skills from Harvard on why revenues from 'taxes' failed to meet expectations.

Jokay07:
I have a question to ask you, tell me what is wrong with the explanation he provided? Is it a propaganda too?
It's better to put something in form of question and as for thorough edification rather than making criticism that will expose someone's low level of understanding. IPob has successfully projected their level of understanding as regards to this issue, that's was why I was reluctant to make explanation because at the end of the day, I will still be insulted.

tuale4u:


The IPOB guy did not understand the budget. let me help him explain. I work in oil company.

1. The Federal government budget is the Budget of the federal government alone. Not the Budget of the country.
Thus from the Nigeria sharing formula, the Federal government takes about 54% of the total oil revenue accruing to the country (Nigeria Federation).

2. Most of the oil production in Nigeria are JV and PSC. Using the JV template, Nigeria (the federation not Federal govt) only owns 60% of the oil produced and the Oil companies owns the remaining 40% of the oil produced per day .

thus the 2.2 million per day, only 0.6*2.2million=1.32million belong to Nigeria (The federation).

Federal govt share (Potential) = 0.54*1.32million=712,800 per day.

3. The actual average production per day is about 80% of the Potential production
this is because of 20% shutdown for maintenance, unplanned shut downs, pipeline vandalisation etc.

Thus the Federal govt actual average production per day = 0.8*712,800=570,240.

4. Today the average cost of production per barrel in Nigeria is about $18 per barrel.
Actually some onshore field cost are as low as $10 per barrel while some deep offshore and shallow offshore cost are as high as $25 dollar per barrel. Today more than 60% of Nigeria crude are from Offshore. thus using an average cost of $18 per barrel is realistic.

Thus out of the $38 dollar per barrel price of oil, the net revenue to the govt is about $20 per barrel.

thus the expected revenue to federal government from direct sales of Crude oil in 2016 is:

= $20 *199naira/1$ *570240*366*billion/1000000000= 830billion naira


From my estimation the Federal government expected revenue from direct oil sales is about 830billion naira which is very close to 820 billion naira estimated from federal government.


However, this is not all the federal govt get from having oil in this country. The oil companies pay company tax in hunderds of billion of naira.
But the govt choose to call it company tax because other companies that are not oil companies pay tax too. However the company Tax of oil companies is about 85% of their profit. Thus of the about 1.5 trillion naira expected revenue from Company Income Tax (CIT), Value Added Tax (VAT), Customs and Excise duties, and Federation Account levies, about 50% of it are coming from oil companies.

Validated:


CIT (Company Income Tax) is different from PPT (Petroleum Profit Tax). Perhaps you need to confirm where exactly PPT is hidden. While CIT is calculated at 30% of taxable profit, PPT is @ 85%. Kindly review and revert so we do not hide some income. You are doing fairly well though! There still lot of gaps for manipulation. Zero based budget should be tightly nitted to avoid siphoning.

divineappo:
@tuale4u; do u really mean, oil companies pay 85% of their profit as tax to the nigerian govt. u mean 85%? yet wit such money, we still have bad road, epileptic power supply, many citizens lack clean water, poor infrastructures....e.t.c.

porka:


But you people did everything humanly possible to avoid going detailed like this previously.

When they told you about shut-ins then your response was angrily largely centred on how the past administrations encouraged bunkering.

Even when told that the 60% Joint Ventures production costs must be funded by Nigeria you violently shouted in anger to show your disdain for thorough scrutiny.

Now that your people are at the other end, it's most convenient for you to start 'displaying your expertise' in oil and gas matters.

Everyone is now a 'PhD holder' and an industry expert when Buhari's calculations on mega billions have all but failed to yield anything.

By next budget, we are expecting more 'tax and audit' experts to display their newly acquired skills from Harvard on why revenues from 'taxes' failed to meet expectations.

tuale4u:


The IPOB guy did not understand the budget. let me help him explain. I work in oil company.

1. The Federal government budget is the Budget of the federal government alone. Not the Budget of the country.
Thus from the Nigeria sharing formula, the Federal government takes about 54% of the total oil revenue accruing to the country (Nigeria Federation).

2. Most of the oil production in Nigeria are JV and PSC. Using the JV template, Nigeria (the federation not Federal govt) only owns 60% of the oil produced and the Oil companies owns the remaining 40% of the oil produced per day .

thus the 2.2 million per day, only 0.6*2.2million=1.32million belong to Nigeria (The federation).

Federal govt share (Potential) = 0.54*1.32million=712,800 per day.

3. The actual average production per day is about 80% of the Potential production
this is because of 20% shutdown for maintenance, unplanned shut downs, pipeline vandalisation etc.

Thus the Federal govt actual average production per day = 0.8*712,800=570,240.

4. Today the average cost of production per barrel in Nigeria is about $18 per barrel.
Actually some onshore field cost are as low as $10 per barrel while some deep offshore and shallow offshore cost are as high as $25 dollar per barrel. Today more than 60% of Nigeria crude are from Offshore. thus using an average cost of $18 per barrel is realistic.

Thus out of the $38 dollar per barrel price of oil, the net revenue to the govt is about $20 per barrel.

thus the expected revenue to federal government from direct sales of Crude oil in 2016 is:

= $20 *199naira/1$ *570240*366*billion/1000000000= 830billion naira


From my estimation the Federal government expected revenue from direct oil sales is about 830billion naira which is very close to 820 billion naira estimated from federal government.


However, this is not all the federal govt get from having oil in this country. The oil companies pay company tax in hunderds of billion of naira.
But the govt choose to call it company tax because other companies that are not oil companies pay tax too. However the company Tax of oil companies is about 85% of their profit. Thus of the about 1.5 trillion naira expected revenue from Company Income Tax (CIT), Value Added Tax (VAT), Customs and Excise duties, and Federation Account levies, about 50% of it are coming from oil companies.

obailala:
Thanks for this well articulated explanation, I didnt even know much of this myself. Regarding the IPOb guys, I can assure you that no matter how well you explain this to them, they have already traded their brains for foolish sentiments and would never be able to understand what you are saying. However, do not let their responses discourage you, because there are actually a lot of 'quiet' people on this site who are genuinely willing to learn and who would learn a lot from such brilliant posts.

Jokay07:
I have a question to ask you, tell me what is wrong with the explanation he provided? Is it a propaganda too?
It's better to put something in form of question and as for thorough edification rather than making criticism that will expose someone's low level of understanding. IPob has successfully projected their level of understanding as regards to this issue, that's was why I was reluctant to make explanation because at the end of the day, I will still be insulted.

Princemilla:
Weldon tuale4u I love the well detailed explanation

quid:

Stop using "objectivity" to cajole yourself.
Wake up . . .LOL

Jokay07:
Op, You even have time to explain. You should have allowed them to swim in the pool of ignorance before you rescue them with this on point explanation. I saw the thread too, but when I discovered that it was composed from IPOB section, I just close it and skip to the next topic.
You are just wasting your time because these people won't understand what you meant by JV and PSC.
The time and effort you used to explain this thing to this bunch of dullards could have been used to do something more profitable.

Arsenate:
actually the op didn't waste his time. I learnt a lot. Op did a good job breaking it down... Mathematically