Oil marketing firms face pressure as profits tumble

MOST OF THE MA JOR PLAY ERS in the downstream sector of the nation’s oil and gas sector saw their profits tumble in the first six months of this year, as they lamented that their margins “are eroding”.

An analysis of the financial statements of the oil marketing companies listed on the Nigerian Stock Exchange showed that only Conoil Plc and Forte Oil were able to grow their profits in the first half of 2019.

MRS Oil Nigeria Plc posted a loss of N990.71m in the six months-period ended June 30, 2019, compared to a profit after tax of N505.55m in the same period last year.

The company suffered an operating loss of N1.5bn in 2018, compared to an operating profit of N0.10bn in 2017.

Total Nigeria Plc, a subsidiary of French oil major Total Group, suffered a 98 per cent drop in its profit after tax to N129.96m from N5.67bn.

Total is the only international oil company operating in the downstream sector of the Nigerian oil and gas industry.

11 Plc, formerly known as Mobil Oil Nigeria Plc, saw its profit after tax dip by 23 per cent to N4.17bn in the first half of 2019 from N5.45bn in the same period of 2018.

The United States-based ExxonMobil divested its 60 per cent stake in Mobil Oil Nigeria in 2017 to Nipco Plc, an indigenous Nigerian downstream oil and gas company.

Eterna Plc’s profit after tax plunged by 88.37 per cent to N165.04m in the first half of this year from N1.42bn in the same period last year.

Oando Plc, an indigenous integrated energy group, recorded a 15.59 per cent drop in its H1 profit after tax to N7.17bn from N8.49bn.

Oando announced in July 2016 that it had completed the partial divestment of its interest in its downstream business to Helios Investment Partners and the Vitol Group. It sold 60 per cent stake in Oando Marketing Limited, which was renamed OVH Energy after the acquisition.

Conoil grew its profit after tax to N1.03bn in the first half of the year from N550.65m in the same period last year.

Forte Oil posted a profit of N5.45bn in the six monthperiod ended June 30, 2019, compared to N366.55m last year.

“Our major problem now is our margins. Given the depreciation of the naira in recent years, the margins have been depreciating in real terms. And this is the same environment where not only are governments requiring us to pay more money for various things, employees are asking for more money; that is why the profitability has continued to go down,” the Chairman of the Major Oil Marketers Association of Nigeria, Mr Adetunji Oyebanji, explained.