₦airaland Forum

EternalTruths:
The greatest disaster that will befall Buhari on social media will not come from pro Jonathans but from pro Buharis like you who become easily angered to the point of going off topic instead of presenting winning points.

Bevista:
My dear, you are too much in a haste to find fault and all you end up doing is displaying your ignorance in a public forum. That is what happens to a hate-filled and prejudiced mind.
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First and foremost, that figure was presented by the OP of this thread. Go back and check the figure and you will see that it says "GROSS EARNINGS FOR ENTIRE 2016" (that is if you know what that means) and not price per barrel. That figure is gotten by multiplying price per barrel ($38) x daily production (2.2mbbls/day) x the whole year (365 days) to arrive at an annual gross earning of $30.15bn

Bevista:
I'll help cure your ignorance, not for your sake but for the sake of others that may stumble on this junk.
First of all, there is a Joint Venture Contract (JVC) and Profit Sharing Contract (PSC) between the Nigerian Government and the International Oil Companies (IOCs). While there are slight variances in each of the contract, the Nigerian State has an average of about 59% stake in the contracts.
When oil is sold for $38, the Nigerian State only has around 59% of that total figure. Secondly, the amount that comes to the Nigerian State goes into the Federation Account to be shared to all tiers of government. The Federal Government has only around 54% of this amount.
Now let's deconstruct your figures again:
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(1) Gross earnings for entire 2016 = $30.51bn
(2) Nigerian share in Dollars (59%) = $18.00bn
(3) Budget Naira Exchange Rate = N197/$
(4) Nigerian share in Naira = N3.54tn
(5) 13% to Oil Producing States = N461bn
(6) Balance in Federation Account = N3.083tn
(7) Federal Government Share (54%) = N1.66tn
The figures above are GROSS figures. You'll have to discount the COST OF PRODUCTION to arrive at a NET figure for the Federal Government.

EternalTruths:
it is clear how you arrived at that figure

Now tell Nigerians why Buhari declared an expected revenue of 830Billion naira from oil, when your figure below which I highlighted blue is 1.66 Trillion naira




Is Buhari being outsmarted by Tinubu's boys.?

Demdem2:

I requested for facts to buttress ur lies against Buhari and suddenly u are accusing me of going off topic...... Hello, are u ok? How am I going off topic? Am only angered at ur refusal to substantiate ur lie.

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

According to Retired Major General Muhammadu Buhari:
"2016: Budget Assumptions;
After reviewing the trends in the global oil industry, we have set a benchmark price of $38 per barrel and a production estimate of 2.2 million barrels per day for 2016. In 2016, oil related revenues are expected to contribute N820 billion."

IPOB'S DECONSTRUCTION BUHARI'S LIES:

1 barrel of crude oil = $38
Estimated production per day = 2.2 million
Gross earning per day based on $38 per barrel = $83.60 million
Gross earning for entire 2016 (365 days) = $30.514 billion
2016 Gross earning in Naira (assuming $1 = N200) = N6.1028 trillion
But, according to Buhari, Expected revenue from oil = N820 billion
Difference between Gross earning and Expected revenue = N5.2828 trillion
Percentage of Expected revenue to Gross earning = 13.44%
Percentage of the Difference to Gross earning = 86.56%

QUESTIONS BY IPOB:
1) What is the total amount, per barrel, of crude oil that comes to Government after sales, that is, after removal of the cost of operation/production?

2) How did Buhari and his gangs come up with the 2016 Expected revenue of N820 billion when the 2016 Gross earning from oil, based on $38per barrel, will be N6.1028 trillion?

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?

4) Is Buhari with his gangs telling his Nigerian people that out of N6.108 trillion, Nigeria will only receive N820 billion? And if so, why? what happens to the remaining N5.2828 trillion or is that the cost of producing 803 million barrels of oil in the course of 365 days? If so, how did that N5.2828 trillion cost come about?

5a) Even if we go by the Expected revenue of N820 billion and crude oil production of 2.2 million per day for 365 days totaling 803 million barrel in 2016, calculations with respect to Expected revenue of N820 billion show a projected revenue of N1,021.17 per barrel or $5.106 per barrel (assuming $1:N200 ratio). So, is the expected net income that comes to Government for 2016 going to be $5.106 per barrel after selling the crude oil at $38 per barrel?

5b) Where is the difference of $32.894 per barrel going to?

5c) Is $32.894 the cost of overheads in producing one barrel of crude oil?

5d) If not, then into who's account, has this $32.894 per barrel gone?

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

EternalTruths:
it is clear how you arrived at that figure

Now tell Nigerians why Buhari declared an expected revenue of 830Billion naira from oil, when your figure below which I highlighted blue is 1.66 Trillion naira




Is Buhari being outsmarted by Tinubu's boys.?

EternalTruths:
It is clear how you arrived at that figure

Now tell Nigerians why Buhari declared an expected revenue of 830Billion naira from oil, when your figure below which I highlighted blue is 1.66 Trillion naira

Is Buhari being outsmarted by Tinubu's boys.?

EternalTruths:
You went off topic by bringing up a different issue all together

When it is time to argue secession we argue and when it is time to argue economy we argue.

Demdem2:

Go back and read and put ur brain to work. U Av been well tutored but has refused to accept.


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).

That money isn't for FG alone but all federating states, abuja inclusive. Oil producing states additional revenue, ecological funds savings etc.
Fg can't budget on the entire 1.66 Trillion because it's not theirs alone. U budget on what is strictly urs.

Bevista:
Guy, you are obsessed by Tinubu and I believe he is really smart but clearly overrated. Tinubu cannot outwit everybody. Incase, you have not noticed, he has already been cut to size - he lost control of the National Assembly and had very little or no input in the Ministerial List.
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Back to the subject. I told you that the N1.66tn figure is GROSS EARNINGS. If you deduct the COST OF PRODUCTION (which I have heard to be around 50% - not sure), then you arrive at a figure much closer to N820bn.
You've got to realize that it cost money to produce the oil and transport it to the market. The final selling price ($38) is not all profit.

EternalTruths:
You said federal government gets 54% of the total revenue

My question

Who gets the remaining 46% .? Is it the states and LGs or others I don't know


Question 2

If it is the states and LGs that get the 46%, why then did you include them in the 54%.





Thank you but

Unknown to you, the cost of production is where the true corruption takes place.

If Buhari don't know the true cost of production, he could be outsmarted.

Now look at this calculations below

1.66tr - 830b = 830b

That figure is too much

If the real production cost is 400b or less, it means that someone can disappear with the extra 400b or more


Think deeply my friend

Put aside your political inclination

insecticide:
bro, you have to deduct the cost of production first before u can then apply the 54%/46% sharing formula.

EternalTruths:
You said federal government gets 54% of the total revenue

My question

Who gets the remaining 46% .? Is it the states and LGs or others I don't know


Question 2

If it is the states and LGs that get the 46%, why then did you include them in the 54%.





Thank you but

Unknown to you, the cost of production is where the true corruption takes place.

If Buhari don't know the true cost of production, he could be outsmarted.

Now look at this calculations below

1.66tr - 830b = 830b

That figure is too much

If the real production cost is 400b or less, it means that someone can disappear with the extra 400b or more


Think deeply my friend

Put aside your political inclination

Bevista:
Nna, the sharing formula from the Federation Account is public knowledge. Use Google bro, it will cure your ignorance. The only reason I am bothering to respond to you is for the sake of others that may stumble on this thread. The sharing formula is:
(1) Federal Government - 52.60%
(2) State Governments - 26.72%
(3) Local Governments - 20.60%
http://businessnews.com.ng/2012/04/06/revenue-sharing-formula-governors-propose-42-percent-for-states/
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Make some research bro, some oil fields have production cost that is as high as $30/bbl. How much do you think will be the profit from those fields when oil is selling at $38. You need to be speaking with somebody with industry experience & knowledge to help you out. You also need to start reviewing the NNPC monthly report, it will help you a lot - i.e. if you are really interested in understanding the sector or you are simply interested in criticizing Tinubu and Buhari.

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.

carboblanko:
Brilliant analysis mate. Thanks for this break down. This should enlighten the truly ignorant and shame the myopic mischief makers.

EternalTruths:
I know about the sharing formula. That's why I brought it to demdem2 notice


As for you,

I believe you can provide data of other nations and foreign companies production cost. Since NNPC is a nest of corruption that dish out false figures to hide the massive looting taking place in the organization.

Comparison with other oil organizations with that of Nigeria can expose the real corruption in the system

Thank you

Bevista:
Okay, I'll check production cost in other countries and compare it to Nigeria. But I'd like to belief that the cost in Nigeria will be relatively lower due to low labour cost compared to other countries.

EternalTruths:
You said federal government gets 54% of the total revenue

Yes, approximately that percentage because around 1% or so go to ecological funds also.


My question

Who gets the remaining 46% .? Is it the states and LGs or others I don't know

You have answered the question ursef yet u claimed u don't know. U sound confused.


Question 2

If it is the states and LGs that get the 46%, why then did you include them in the 54%.


Please show me where I did such? The budget FG prepared which ur kind and IPOB fools are criticising, does it include incomes and expenditures of states and LG?

EternalTruths:
Thank you

And I promise you that if you do and Buhari is sincere, corruption in NNPC will be killed and lots of money available for development

Please do help Buhari although I don't like him


Thank you