NNPC Rakes in N1.088tn Revenue in Five Months...

● To resume funding of frontier explorations ● Total income dips by N396bn

The Nigerian National Petroleum Corporation (NNPC) made a total revenue of N1.088.88 trillion in the first five months of 2021, a Federation Account Allocation Committee (FAAC) document detailing its operations for the period has shown.

The figure is N396.8 billion lower than the N1.485 trillion revenues it grossed in the first five months of 2020.

However, the corporation has resumed its frontier exploration services suspended in April.

But despite the gross revenue accruals, the corporation failed to fully meet its monthly funding obligation of N414.941 billion for its projects and operations for the period.

Whereas the NNPC has a total annual budget of N4.97 trillion for 2021, sub-divided into N414.941 billion per month, data gleaned from the document showed that in January, it raked in gross revenue of N195.624 billion and N191.194 billion in February.

In March, the NNPC's total revenue stood at N224.589 billion and was N156.366 billion in April, while in May, the corporation grossed a revenue of N320.315 billion to hit N1.088 trillion.

In comparison, for the same period in 2020, gross revenue, which is a summation of receipts from Joint Venture (JV) crude oil, JV gas, Production Sharing Contracts (PSC) and miscellaneous sources stood at N380 billion in January.

The revenue in February was N264.1 billion, in March, it was N324.4 billion, it was N298.1 billion in April and it stood at N219.3 billion in May.

Put side by side the first five months of 2021, gross revenues accruing to the NNPC during the same period of 2020 totalled N1.485 trillion, exceeding this year’s revenue for the first five months by approximately N396.8 billion.

However, the corporation resumed the monthly funding for its frontier exploration services which did not receive any budget in April, but gulped N3.216 billion in May, having received N1.964 billion in January, N1.920 billion in February and N2.255 billion in March.

The NNPC is currently performing exploration and drilling activities of Kolmani River 3, having reported earlier that the first appraisal, Kolmani River 2, in the Gongola Basin, encountered both oil, condensate and gas, which it said were significant finds.

The corporation is also carrying out exploration activities in the Chad Basin further northwards but had to halt its seismic operations after insurgents attacked and killed technical workers and some security forces.

Although financing of frontier exploration basins is currently at the discretion of the corporation, the new Petroleum Industry Bill (PIB), if assented to by President Muhammadu Buhari as it currently exists will make it mandatory for the NNPC to deploy 30 per cent from proceeds of its production sharing, profit sharing and risk service contracts to fund exploration of the basins.

Other projects, which did not get any funding in April, but received renewed financing in May included the gas infrastructure development, which was funded to the tune of N3.919 billion and the Crude Oil Pre-export Inspection Agency Expenses, which gulped N659 million.

In addition, funding for renewables resumed, consuming N196 million, same with the Nigeria-Morocco pipeline, which was not funded in April but received attention to the tune of N8.33 million in May.

In the first five months of the year, whereas N50 billion was budgeted for frontier exploration services, with a projected monthly release of N4.167 billion, N9.356 had been expended as of May for the purpose.

Besides, the document showed that as of May, the NNPC had exceeded its total budget for pipelines security and maintenance by N6.665 billion, consistently over-spending its monthly benchmark of N2.474 billion within the period under review.

In February, the corporation spent N5.813 billion for securing pipelines, N5.320 billion in March, N2.641 billion in April and N5.258 billion in May.

Year-to-date, refineries rehabilitation, (mainly bordering on payment of salaries for workers in the non-functional assets) has consumed N41.667 billion, spending on pipelines security stands at N19.032 billion, pre-export financing is N25 billion, while national domestic gas development has gulped N19.3 billion.

Minister of State, Petroleum Resources, Mr Timipre Sylva, in his recent defence of the monthly spending on the refineries, which are currently producing zero products, stated that the facilities have some fixed overhead costs such as salaries, wages and utilities.

Sylva added that any attempt in the past to lay off the redundant employees had met with stiff resistance from the workers’ unions, mostly from the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association (PENGASSAN).

On product pipelines performance, the NNPC stated that in May, Atlas Cove pumped 177 million litres of petrol, Mosimi-Ibadan did 55.8 million litres, while the Ibadan-Ilorin line pumped 10.653 million litres for the month. There was no activity along the Port Harcourt-Aba pipeline for the period.

For the summary of the contribution of the federal government's Joint Venture (JV) operations with oil companies in May, royalties contributed N9.009 billion (about 31.33 per cent), the contribution of oil tax to the federation stood at N16.1 billion, roughly 56.09 per cent, while profit was pegged at N3.618 billion, that is 12.58 per cent of post-appropriation contribution.