NEITI Reports $21bn Oil Earning for 2017


Chineme Okafor in Abuja

The Nigeria Extractive Industries Transparency Initiative (NEITI) wednesday put Nigeria’s total earning from oil in 2017 at $21 billion.

The amount is 23 per cent higher than what the country received in 2016 from the sector, which was $17.05 billion.

NEITI, however, stated that the 2017 earning was 15 per cent lower than the $24.79 billion recorded in 2015.

It said in the 2017 oil and gas industry report it just published that the breakdown of the financial flows showed that crude oil and gas sales topped the table with about $10.19 billion, while other financial flows accounted for about $10.13 billion.

NEITI added that financial inflows to other entities like the Niger Delta Development Commission (NDDC) and Nigeria Content Development Monitoring Board (NCDMB) were $669.05 million.

In a five-year comparison of revenue flows from the oil and gas sector, the NEITI report explained that: “There was a steady decline in year-on-year revenues from 2013 to 2016, with the sharpest drop of 55 per cent in 2015 compared to the preceding year.

“The year under review experienced a 23 per cent increase in revenues from $17.055 billion in 2016 to $20.988 billion in 2017. In effect, 2017 witnessed a halt in the steady revenue decline the sector has experienced since 2013.”

According to NEITI, the report also showed that inflows from the Nigeria Liquefied Natural Gas (NLNG) as dividend, interest and loan repayment were $834 million, indicating a significant increase of 114 per cent from the 2016 figures of $390 million.

In relation to oil production during the period under review, NEITI said there was a marginal increase of 4.75 per cent, which saw oil production at 690,465 million barrels (mbbls) as against the 659,137mbbls produced in 2016.

“The significant increase in revenues when compared to the increase in production volumes was as a result of the increase in oil prices,” it added.

The report showed that average crude oil price was higher in 2017, selling for an average of $54.44 as against the $43.73 in 2016, signifying an increase of 24.5 per cent.

According to the NEITI report, out of the 690,465mbbls of crude oil produced in 2017, a total of 688,291mmbls was lifted.

The Nigerian National Petroleum Corporation (NNPC) lifted a total of 241mbbls of crude oil on behalf of the federation.
“A breakdown of the liftings shows that federation exports accounted for 135 million barrels while the domestic crude liftings accounted for 106 million barrels,” the report said.

It added that the federation exports volume went down by 36 per cent from 211mbbls in 2016 to 135mbbls in 2017.
NEITI stated that while liftings by the companies amounted to 447mbbls, joint venture operations, production sharing contracts and sole risk operators accounted for 130mbbls, 223mbbls and 79million barrels respectively.

“More so, marginal field and service contract operators lifted 15mbbls and 1mbbls during the year under review,” it stated.
On crude oil allocation for domestic use, the report indicated that “In 2017, the NNPC allocated 105.925mbbls for domestic use. While 25 per cent of this quantity was supplied to the refineries, 69 per cent was on the other hand utilised for the Direct Sales and Direct Purchase arrangement.

“One of the key findings of the 2017 oil and gas report was that despite the improved performance of the oil and gas sector in 2017 when compared to 2016, the projected production volumes were not realised.

“The reduction in projected production figures due to unscheduled maintenance and repair of equipment posed a challenge to production in the year under review.”

It cited other reasons for the reduction as deferred production due to turn around maintenance, vandalism and pipeline integrity issues.

The report also stated that $8.474 billion was budgeted for cash call obligations, but only 49 per cent or $4.13 billion was paid as at January 2018.

“Similarly, out of the $5.125 billion dollars negotiated as outstanding cash call liabilities for 2016, $2.177 billion was paid, therefore, leaving a balance of $2.948 billion,” said the report.
NEITI further observed that 2017 witnessed a huge drop in crude oil theft, sabotage and deferred production.

It said Nigeria lost about 36.5mbbls of crude oil to theft and sabotage and there was 69mbbls lost due to decrease in production volumes resulting from routine maintenance or unplanned repairs of the production facilities.

This, it said, was regarded as a remarkable improvement particularly, when compared to the 2016 figures of 101mbbls and 144mbbls lost to theft and deferred production respectively.

NEITI also noted that there was reduction in pipeline breaks-in 2017 with 924 breaks-in when compared to the figures of the previous years of 2013 – 3,571; 2014 – 3,732; 2015 – 2,832 and 2016 – 2,589 breaks-in.

“This decline suggests a positive return on the actions taken to mitigate vandalism,” said the NEITI, which put the oil sector’s contribution to Nigeria’s Gross Domestic Product (GDP) for the year under review at 8.68 per cent.