₦airaland Forum

After ten months under the stewardship of Dr. Ibe Kachikwu as the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), the state-run oil firm finally turned the corner, reporting an operating profit of N273.74 million for the month of May and reversing the losses of N35 billion made by NNPC over the last 15 years.



A copy of NNPC’s monthly financial and operations management report obtained exclusively by THISDAY yesterday showed that the corporation’s N273.74 million operating profit in May 2016 as against its operating loss of N19.43 billion in April was attributed to improved cost efficiency at the corporate headquarters of NNPC and performance by the Petroleum Products Marketing Company (PPMC).

The monthly report stated: “PPMC recorded a net gain of N17.69 billion as against the net loss of N6.91 billion in April, 2016 following complete stoppage of commercially unfavourable swaps and offshore processing agreements (OPAs).

“Direct-Sale and Direct-Purchase has now replaced the previous regime. Notwithstanding these improvements, renewed and vigorous vandalism of pipelines in Niger Delta means that productions were shut-in and cargoes deferred, which denied revenues streams accruing to NPDC and the federation.”

The report showed that the group’s operating revenue for the months of April and May 2016 were N95.51 billion and N142.53 billion respectively, representing 30.36% and 45.32% respectively of the monthly budget.

Similarly, operating expenditure for the same periods were N121.86 billion and N142.26 billion respectively, which also represents 45.62% and 52.63% of the budget for the months respectively.

Operating deficits of N19.43 billion and a margin of N0.27 billion were recorded for the months of April and May 2016 respectively as against the monthly budgeted surplus of N44.23 billion.

The report said the deficit “was inverted in the month of May 2016 due to significant increase in revenue generation which could be attributed to the rise in petroleum product sales by 51.13%”.

However, NPDC’s substantial portion of crude sales for the month amounting to about N20 billion could not be realised due to crude pipeline vandalism.

The report also highlighted the corporation’s activities for twelve months period of June 2015 – May 2016 to allow for trend recognition.

In the area of crude oil and condensate production, the report showed that a total of 59.56 million barrels of crude oil and condensate was produced in the month of April 2016, representing average daily production of 1.99 million barrels and a decrease of 1.72% compared to March 2016 performance.

“Of the April 2016 production, Joint Ventures (JVs) and Production Sharing Contracts (PSC) contributed about 33.82% and 46.77% respectively. While AF (Alternative Funding or Financing), NPDC and independent oil firms accounted for 13.81%, 1.73% and 3.87% respectively,” the report stated.

On NNPC’s exploration and production subsidiary, NPDC, the report showed that NPDC’s PTD (period-to-date – May 2015 to April 2016) cumulative production from all fields amounted to 33,028,954 barrels of crude oil which translated to an average daily production of 90,243 barrels.

“Comparing NPDC’s performance to national production, the company’s production share amounted to 4.31%. NPDC production is expected to hit production levels of 250,000bp/d after the completion of the on-going NPDC re-kitting project and repairs of vandalised facilities.

“Production from NPDC wholly operated assets amounted to 10,216,198 barrels (or 30.93% of the total production) with Okono Okpoho (OML 119) alone producing more than 82.66% of the NPDC wholly owned operated assets or 25.57% of the total NPDC total production.

“Also on the NPDC operated JV assets, in which NPDC owns 55% controlling interest, crude oil production amounted to 13,296,309 (or 40.26% of the NPDC total production). On the JV assets not operated by NPDC, production level stood at 9,516,447 barrels or 28.81% of the company’s production,” the report revealed.

In the area of national gas production, NNPC in the report stated that a total of 223.63 billion standard cubic feet (bcf) of natural gas was produced in the month of May 2016 translating to an average daily production of 7.21billion standard cubic feet per day (bscfd).

For the period June 2015 to May 2016, a total of 2,836.01bcf of gas was produced, representing an average daily production of 7,749.70 mmscfd during the period.

Production from Joint Ventures (JVs), Production Sharing Contracts (PSC) and NPDC contributed about 69.97%, 21.71% and 8.32% respectively to the total national gas production, the report showed.

On NNPC’s refinery operations, the report said that total crude processed by the three refineries – Kaduna, Port Harcourt and Warri – for the month of May 2016 was 301,604MT (2,211,361 bbls), which translated to a combined yield efficiency of 83.47% compared to crude processed in April 2016 of 351,698MT (2,578,650 bbls) with combined yield efficiency of 89.70%.

“For the month of May 2016, the three refineries produced 242,053MT of finished petroleum products out of 301,604MT of crude processed at a combined capacity utilisation of 16.03% compared to 19.32% combined capacity utilisation achieved in the month of April 2016.

“The adverse performance was due to crude pipeline vandalism in the Niger Delta region coupled with on-going refineries revamp; however the three refineries continue to operate at minimal capacity,” the report stated.

In other developments in the oil industry, Anglo-Dutch oil giant, Shell, also lifted the force majeure on exports of its Bonny Light crude grade, signposting a recovery of Nigeria’s oil and gas production after militant attacks reduced it to a 20-year low

SPDC declared the force majeure on May 10, following a leak that led to the closure of the Nembe Creek Trunk Line (NCTL) by Aiteo Eastern E & P Company Limited.

The Aiteo-operated NCTL and the Trans Niger Pipeline (TNP) are the two main pipelines in the Eastern Niger Delta that transport crude oil produced by Shell, Aiteo and third parties in the eastern operations to the Bonny export terminal in Rivers State.

The resumption of Bonny Light exports came just as the Niger Delta Avengers, the militant group that has claimed responsibility for recent attacks on oil and gas installations, continued its unrelenting destruction of industry facilities in the oil-rich region, when it blasted three more manifolds operated by US oil giant, Chevron, in Delta State on Wednesday night.

Shell said in a statement yesterday that the force majeure had been lifted following the restoration of production to the Bonny export terminal.

According to the statement, the force majeure was lifted from 09:00 a.m. Nigerian time (0800 GMT) on Thursday (yesterday).

Despite the gradual recovery of Nigeria’s oil production, two other Nigerian crude grades – Forcados and Brass River – remain shut-in.

Eni, the Italian parent of Nigerian Agip Oil Company (NAOC) on May 22, 2016 declared force majeure on oil exports from the Brass Oil export terminal off Bayelsa shoreline, following militant attacks on the Ogbaimbiri-Tebidaba pipeline.

Shell on February 21, 2016 declared force majeure on Forcados liftings after the disruption in production caused by a spill on the 48-inch Forcados terminal subsea export pipeline, which was bombed by the Avengers.

The force majeure effectively shut-in 300,000 barrels per day from Shell and third party companies in the Western Niger Delta that rely on the Forcados pipeline for shipment of crude to the Forcados export terminal.

Despite these production shortages, Nigeria’s crude exports have been on track to rise to 2.2 million barrels per day in August from the current 1.9 million barrels per day, according to the Minister of State for Petroleum, Dr. Ibe Kachikwu, even as the Avengers has resumed hostilities before the expiration of a 30-day ceasefire.

The Aiteo Group acquired a 45 per cent stake in the 97-kilometre NCTL and the prolific Oil Mining lease (OML) 29 from Shell and other joint venture partners – Total and Agip – in 2014.

Aiteo, last May, confirmed a leak on the pipeline and sent out contractors to the site for repairs after the area had been isolated.

About 75,000-78,000 barrels per day of Aiteo’s crude oil was affected by the closure, while Shell’s volume and other third party crude affected by the shut-in could not be ascertained.

THISDAY gathered that the pipeline has capacity to move 150,000 barrels per day but about 600,000 barrels of liquids can be evacuated at the Cawthorne Channel-end of the facility.

But an air of uncertainty continued to pervade the Niger Delta as the Avengers continued its wave of attacks, when it bombed Chevron’s manifolds on Wednesday night in Delta State, the third of such attacks on the company’s installations in the region.

The implacable group, which made the attack known on its website late Wednesday, said it blew up RMP 22, 23 and 24 all in Warri.

A remote manifold platform (RMP) is where small oil or gas pipelines converge before connecting to a larger storage hub.

In the statement by its spokesperson, Brig.-Gen. Mudoch Agbinibo, the group said: “Between the hours of 10:50 p.m. and 11:10 p.m. our strike team blew up Chevron manifolds. The manifolds are RMP 22, 23 and 24.”

The group, which also wished the Muslim faithful “Happy Eid Mubarak”, said it was closing all its social network accounts due to the activities of scammers and impersonators attributing some of the bombings in the region to it.

The Avengers also denied responsibility for the alleged attack on the Nigerian National Petroleum Corporation (NNPC) pipeline at Eleme in Rivers State last Saturday and encouraged other groups carrying out similar acts of sabotage to continue in the act, but must be courageous enough to claim responsibility instead of accusing the Avengers falsely.

The group cautioned the media to beware of the imposters and follow its activities only on its website.

“This Facebook account/page is an impostor page that was open by a fraudster to deceive the general public.

“We are warning any group that wants to do anything, to go about their activities without tagging us. Instead do your activities and claim responsibility.

“The NNPC pipeline blown up in Eleme that was posted by this Facebook account yesterday wasn’t carried out by Niger Delta Avengers.

“We are calling on all national dailies to take note. Niger Delta Avengers is not out to mislead the public.

“As a result, we are closing all our social network accounts and will be using our website to pass information to the general public,” it said.

The militant group resumed bombing of the country’s oil economy last weekend, attacking oil and gas facilities belonging to NPDC, NNPC and Chevron at different locations in Warri.

The resumption of hostilities, according to a security source, was in response to the arrest of two key members of the militant group by the Department of State Security (DSS).

One of the arrested suspects identified as “Sensor” was said to be a very close aide to the former militant leader, Chief Government Ekpemupolo, alias Tompolo, who is suspected to be the arrowhead of the spate of bombings of oil facilities.

Tompolo, who is now a fugitive of the law, is being prosecuted by the federal government for alleged corruption.

todayboy:
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todayboy:
Hailing Hailers come and celebrate buhari achievement small oil companies are making profits in billions nnpc make 274 million they are advertising it in newspapers

todayboy:
Hailing Hailers come and celebrate buhari achievement small oil companies are making profits in billions nnpc make 274 million they are advertising it in newspapers

DelGardo:
Great!

We have seen that it is possible to bring change and progress. When the man said he will stabilise the industry they laughed. Because successive administrations failed to bring transparency and professionalism to management of the oil sector, they thought it was impossible.

We now have sincere leadership. Despite their determination to see this government fail, despite their un-belief and distractions, lies and mischief, we are making progress. Things can only get better!

May God strengthen Buhari and those he is working with to deliver the change we voted for.