NNPC HQ targeted N912m, posted zero revenue in October

 The corporate headquarters of the Nigerian National Petroleum Corporation did not generate any revenue in October 2016 and failed to contribute any amount to the group purse for the month.

The latest monthly NNPC Group Financial Report obtained in Abuja on Friday showed that the national oil firm’s headquarters failed to generate revenue despite targeting a revenue generation of N912m for the month in review.

The CHQ had in September 2016 generated N4.14m, recorded an expenditure of N13.333bn and posted a total deficit of N13.329bn.

It, however, could not sustain that tempo of income generation in October, as it posted zero revenue in the review month, incurred an expense of N14.84bn and recorded a total deficit of N14.84bn.

A further analysis of the report, however, showed that the NNPC as a group reduced its total losses from N17.18bn in September to N16.85bn in October, while its deficit for the 10-month period beginning from January this year was put at N161.76bn.

The national oil firm stated that it had been operating in a challenging environment which limited its aspiration to make profit.

It explained that the marginal improvement in its trading deficit between September and October was due to improved petroleum products sales and enhanced cost control across the group.

“Factors that still drag the NNPC performances include the force majeure declared by the SPDC as a result of vandalised 48-inch Forcados export line,” it added.

In their review of the corporation’s performance, analysts at FBN Capital Research stated that the NNPC results were again hamstrung by sabotage.

They highlighted the fact that the corporation’s accounts for October showed a group operating deficit of N16.9bn, which was slightly lower than the N17.2bn recorded in the previous month.

They said, “The driver was an improved performance from the Pipeline and Products Marketing Company, which boosted its sales to N112bn from N104.9bn and its operating result to a profit of N1.4bn from a loss of N11.2bn. This more than compensated for weaker figures from the Nigerian Petroleum Development Company as well slightly worse numbers from the three refining companies.”

FBN Capital, however, observed that those were acceptable results in the adverse circumstances, adding that the worst of which was the shut-in of more than 300,000 barrels per day from February as a result of the sabotage of the Forcados terminal export line.

They further noted that the impact of vandalism was felt on the Bonny, Usan and Que Ibo terminals, a development that led to an average crude production of 1.65 million barrels per day in September.

The analysts said, “We can see the cost of sabotage another way. In September, output under production sharing contracts amounted to 27.7 million barrels, compared with 27.8 million barrels in October 2015.

“Over the same period, output from the corporation’s joint ventures, under alternative financing arrangements and from the NPDC declined by 9.7 million barrels, 6.1 million barrels and 1.9 million barrels, respectively.

“The January-October operating deficit of N162bn compares with N241bn in the same period of 2015. Cost control has been critical but we repeat our point that the corporation cannot become the police in the Niger Delta.”