Summary Of NNPC Financial and Operations Reports April 2016
Nigerian Crude Oil production for the month of March 2016 stood at 57.43 Million Barrels which is 3.10% lower than February, 2016 production and so far the lowest recorded in the 12 months review period. Recent upsurge in vandalism has negatively impacted on the Nigerian crude oil production output, losing its African top Crude Oil producer to Angola.
About 380,000bopd remained shut-in due to vandalism of the 48” sub-sea export line on 15th February, 2016. Hence, all March Cargoes were deferred until the repair is completed. Also the nation has lost over 1,500 megawatts of power supply to the damage as gas supply from Forcados, which is Nigeria’s major artery, accounts for 40-50 percent of gas production. Incessant pipeline vandalism poses the greatest threat to the industry.
In the downstream sector, fuel scarcity lingers into this period despite ramp-up of Petroleum supply and distribution to all states to ensure product availability in the Country. Local refining capacity has remained below commercial threshold due to prolonged Turn Around Maintenance (TAM) issues, pipeline vandalism and resultant losses. In the same vein, Forex challenges have also impeded products importation which affects the set objective of the Corporation.
This ninth publication of NNPC monthly financial and operations report indicate an operational loss of ₦19.43billion in April 2016 as against ₦18.89 billion in the month of March 2016. The deficit increased by 2.83% in the month of April 2016 due to slight decline in revenue generation which is attributed to decrease in petroleum product sales by 7.11%. Also, losses were incurred by PPMC, being the sole supply of last resort in its drive to bridge the petroleum products supply gap as acute shortage which compelled PPMC to sometime engage in a commercially unfavourable short term arrangements. Other factors that contributed to the high operations cost in CHQ includes expenses related to the ongoing restructuring program. NPDC’s crude sale for the month is still hampered by forcados pipeline vandalism which continued to deny NPDC of monthly crude oil revenue of about ₦20.0billion
Key Challenges and Way Forward:
• Force Majeure declared by SPDC due to the recent vandalism of 48-inch Forcados export line resulted in production shut-in of about 130k bopd for NPDC only.
• This adversely impacted on NNPC’s April 2016 report leading to a loss of over N20billion of NPDC Oil revenue.
• Repair works is ongoing and is expected to last for about 6 more weeks.