Chineme Okafor in Abuja
The Nigerian National Petroleum Corporation (NNPC) has reported a reduced trading deficit on its operations for the month of January 2017, noting that its deficits came down to N14.26 billion from the N17.01 billion its recorded in December 2016.
The corporation also noted that the combined installed capacity utilisation of its refineries in Port Harcourt, Warri and Kaduna increased by about 29 percentage points in January 2017 when compared with their performances in December 2016.
According to the latest monthly financial and operations report of the NNPC for the month of January, the capacity utilisation of the refineries rose to 36.73 per cent in January 2017 as against 7.55 per cent in the previous month of December 2016.
The report was released in Abuja yesteday by the corporation. It ascribed the improvement to the implementation of the 12 Business Focus Areas (BUFA) strategy introduced by the Group Managing Director of the NNPC, Dr. Maikanti Baru.
According to the report, the refineries benefitted from the introduction of a new Refineries Business Model under the 12 BUFAS strategy which has transformed them from “tolling plants to merchant plants” thereby placing them on the path of profitability.
It said it recorded a N2.75 billion reduction in its trading deficit in the period under review, thus putting the total trading deficit at N14.26 billion.
“This represents about 16.19 per cent improvement compared to N17.01 billion recorded in December 2016, in spite of the corporation’s challenging situations which limit its aspiration to profitability,” said the report.
NNPC explained that the Port Harcourt Refining Company (PHRC) and Warri Refining and Petrochemical Company (WRPC) posted surpluses of N5,115,000,000 and N404, 000,000 respectively.
It stated that under the new refinery model, each refinery purchases crude oil at export parity price, processes and sells the corresponding products on its own account.
“This is different from the previous ‘Tolling Plant’ model where the refinery does not take title to the crude, but rather charges a tolling/processing fee to the owner of the crude which was PPMC on behalf of the corporation,” the report stated.
Apart from PHRC and WRPC, NNPC said five other of its subsidiaries also posted surpluses. These, it added include the Nigerian Petroleum Development Company (NPDC), the Nigerian Gas Pipelines and Transport Company (NGPTC), NNPC Retail, the National Engineering and Technical Company (NETCO), and the Integrated Data Services Ltd (IDSL).
According to the document which is the 18th in the series of NNPC’s monthly reports since it began publishing its business transactions, some of the factors that impeded the corporation’s performance include the production shutdown of the Trans Niger Pipeline and Nembe Creek Trunkline due to leakages, the shutdown of Agbami Terminal for a mini turnaround maintenance, and the subsisting force majeure declared by Shell Petroleum Development Company (SPDC) as a result of the vandalized 48-inch Forcados export line after its restoration in October 17, 2016.