By Emmanuel Addeh
The Nigerian National Petroleum Corporation (NNPC) recorded a 44 per cent drop in the total amount of crude oil lifted in June, 2020 as a result of the production output cut announced by the Organisation of Petroleum Exporting Countries (OPEC) in April, THISDAY learnt yesterday.
Also contributing to the decrease to the loss were a number of shut-ins due to various reasons, mainly emergency repairs, facilities’ leakages, fire outbreaks, system failure as well as protests in parts of the Niger Delta.
A copy of the NNPC’s presentation to the Federation Account Allocation Committee (FAAC) meeting this week, which detailed the corporation’s June 2020 crude oil and gas sales and proceeds received in July, obtained by THISDAY showed that the NNPC lost almost 50 per cent of the crude lifted in June compared to May this year.
An OPEC deal to reduce daily crude oil production by about 9.7 million barrels per day was reached in April, following the drastic fall in prices due to shortage in demand in the international oil market as a result of the COVID-19 pandemic.
Although Nigeria is yet to fully compensate for its over-production in the early months, the report showed that over 3 million barrels were lost to its decision to partially comply with the deal in June.
“The overall NNPC crude oil lifting of 7.61 mbbls (export and domestic crude) in June 2020 recorded 44 per cent decrease relative to the 13.53 mbbls in May. The decrease is attributable to shut-ins amounting to 3.8 mbbls and production cuts in compliance with OPEC directives,” the corporation noted.
In terms of revenue for July, the NNPC noted that its crude oil export revenue received in the month amounted to $54.98 million, equivalent to N19.79 billion which represents a decrease of 75 per cent compared to June 2020.
“This variance is attributable to a decreased export volume of 1.3 million bbls lifted in June compared to 8.4 mbbls in May,” it explained. It added that domestic gas revenue received in July 2020 was N4.6 billion and N482 million for domestic gas receipts in the month.
The national oil company noted that feedstock valued at $29.33m was sold to the Nigeria Liquefied Natural Gas (NLNG) Limited during the period out of which $27.72 million was received during the month of July.
According to the NNPC, the sum of $39.74 million being CNL EGTL sales receipts, miscellaneous receipts, gas and ullage fees and interest income was received in July 2020, while the actual federation entitlement for the month of July 2020 was N48.91 billion.
It said that this amount was augmented to N70.82 billion by deferring Joint Venture cost recovery , government priority project and value loss due to regulation.
The NNPC posited that production shut-in losses due to shut-ins amounted to 3.82 million barrels due to faulty equipment, planned repairs , fire incidents, host community protests , gas leak detection , leaks on corroded pipes, emergency maintenance and firm ware upgrade.
It put the FAAC remittance for July at N70.8 billion while the June crude oil exports payable in September in line with 90 days payment grace was N89.5 billion.
The corporation listed the government’s priority projects currently as the 36*196km Oben to Geregu pipeline which it said has been completed, Excravos-Lagos pipeline expansion phase 1, which is 85 per cent completed, Excravos-Lagos pipeline expansion 2, which is 99.3 per cent completed and the Odidi Warri gas pipeline expansion project.
Others are: the AKK project, gas supply to NIPP in Egbema, Ogidigben /Delta gas city and industrial park/port facilities as well as the Obiafu/Obrikom-Oben project in Rivers, Delta and Edo States., among others.
The corporation stated that it paid N395 million for pipeline and other facilities’ repairs, N971 million for marine distribution and N435.9 million for strategic holding, all amounting to about N1.8 billion for the month of July.