Chineme Okafor in Abuja

The Nigerian National Petroleum Corporation (NNPC) on Monday said that its monthly Naira remittance to the federation account dropped by N382 million from N86,340,969,392 to N85,958,157,358 in the month of January.

The corporation in its January financial and production report which was released on Monday also explained that it has cut its monthly loss figures from N11.86 billion which it previously recorded in its December records to N3.55 billion.

For its joint venture funding requirements, the report stated that the total export proceeds of $407.86 million which was recorded in January and consisting of crude oil receipt of $201.92 million, Liquefied Petroleum Gas (LPG) and other gas liquids proceed of $135.89 million, as well as miscellaneous receipt amounting to $70.05 million were swept into the Joint Venture Account.

The report noted that the revenue was accrued from a total of 65.95 million barrels (mb) of crude oil and condensate which was lifted for the month of December. It added that an average of 2.08mb of crude oil and condensate was produced daily within the period.

According to it, federation crude oil and gas liftings are broadly classified into equity export crude and domestic crude. Both categories are however lifted and marketed by NNPC and the proceeds remitted to the Federation Account.

The corporation also ensured that monthly export receipts are paid directly into a JP Morgan Account operated by the Central Bank of Nigeria (CBN), after adjusting for calenderised Joint Venture (JV) Cash Calls, being a first line charge as provided in the Appropriation Bill, the balance is then transferred to the Federation Account.

The report, in it its explanation of the federation account transfer, said: “NNPC transferred the sum of N85.96 billion into the federation account for the month under review.

“Thus the sum of N1,049.90 billion have been paid to the Federation Account being domestic crude oil and gas and other receipts from February 2015 to January 2016.”

On its current operational deficits, it said: “Operating deficits of N11.86 billion and N3.55 billion were recorded for the months of December 2015 and January 2016 respectively as against monthly budgeted surplus of N44.23 billion.”

NNPC also disclosed that it was making efforts to engage financial advisors to help it devise strategies for alternative funding of its joint venture operations.

“The constraint to Nigerian upstream sector has been under-funding of the sector which prompted the use of debt to finance essential projects aimed at arresting production decline and grow producible reserves.

“Conventional oil and gas fields typically have average decline rates of 10 to 20 per cent per year which requires a serious step-up in investment in infrastructure and production facilities to maintain production plateau or to grow production.

“In this regard, NNPC recently kick started the process of selecting financial advisors for alternative financing initiative aimed at bridging the current upstream JV funding gap, growing NPDC production and establishing energy investment fund for downstream infrastructure development,” it explained.

On gas supplied to the country’s thermal electricity generation plants, the report stated a total of 734 million standard cubic feet per day (mmscf/d) of gas was delivered to the gas fired power plants in the month of January to generate an average power of about 3,237 megawatts (MW) per day, compared with February 2015 to January 2016 average gas supply of 699mmscfd and power generation of 2,990MW.