Revamped Forcados Terminal Reduces NNPC’s Trading Deficit

Chineme Okafor in Abuja

A monthly report of the Nigerian National Petroleum Corporation (NNPC) has disclosed that the state-run oil firm reduced its operational deficit for the month of August to N5.7 billion from N11.9 billion it recorded in July, following the resumption of operations at the Forcados export terminal which was down and out of operations for a very long time.

During the time the export terminal was out of operation, the NNPC stated that it was losing a lot of revenue that should have accrued to it, and that this was affecting its operations and books of accounts.
However, in its August monthly operations and financial reports which it released on Sunday in Abuja, the corporation stated that despite the resumption of operations at the Forcados and its contributions to its finances, the fact that its refineries in Kaduna and Port Harcourt were down during the period also affected its financials negatively, hence the deficit in its books.

It said: “The 25th publication recorded deficit of N5.74 billion which is relatively lower than the previous month’s deficit of N11.87 billion. This represents 53.10 per cent or N6.14 billion improvement compared to the last month’s performance.

“This improved performance is mainly due to revamping of Forcados export terminal which enhances NPDC’s performance despite the low performance of the downstream value chain due to high crude oil inventory and the shutdowns of KRPC and PHRC during the period as a result of several maintenance interventions. Other drags to this month performance includes shut down of Trans-Niger pipeline and production shut-in to Que Iboe terminal and Bonga terminal.”

On group operating revenue for the months of July 2017 and August 2017, the NNPC said they were N269.30 billion and N265.10 billion respectively.
“These represent 73.23 per cent and 72.09 per cent respectively of monthly budget. Similarly, operating expenditure for the same periods were N281.18 billion and N270.84 billion respectively, which also represents 88.38 per cent and 85.27 per cent of budget for the months respectively,” the report noted.

On the operations of its Direct-Sales-Direct-Purchases (DSDP) crude oil program within the period, the corporation said: “In July 2017, NNPC allocated 79.71 per cent of domestic crude oil to Direct Sale-Direct Purchase (DSDP) arrangement to ensure petroleum products availability. So far, the arrangement guarantees products stability and creates room for savings. The DSDP arrangement is constantly being reviewed to ensure value is delivered to the corporation and Nigeria as envisaged/promised.”

It said the total export sale of crude oil worth $433.39 million was recorded in August, adding that this performance was 3.37 per cent lower than the previous month.

“Crude oil export sales contributed $308.96 million (or 71.29 per cent) of the dollar transactions compared with $351.90 million contribution in the previous month. Also the export gas sales amounted to $124.42 million in the month. The August 2016 to August 2017 crude oil and gas transactions indicate that crude oil and gas worth $3,238.56 million was exported,” the report explained.

“On receipt from net domestic crude oil and gas, NNPC transferred the sum of N45.10 billion into Federation Account and N83.76 billion to JV cash call for the month under review. From August 2016 to August 2017, Federation, JV, and FG received the sum N804.67 billion, N734.84 billion and N50.64 billion respectively.

“Total export receipt of $442.47 million was recorded in August 2017 as receipt against $430.23 million in July 2017. Contribution from crude oil amounted to $310.34 million while gas and miscellaneous receipt stood at $116.56 million and $15.57 million. Of the export receipts, $154.87 million was remitted to Federation Account while $287.61 million was remitted to fund the JV cash call for the month of August, 2017 to guarantee current and future production,” the corporation added.