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Tuesday, 19 October 2021

The Nigerian National Petroleum Corporation (NNPC) has largely failed to meet its revenue target set for between January to August this year, with a deficit of about N1.276 trillion within the period.

Figures from the national oil company’s funding performance for September indicated that while N3.319 trillion was the income projection for the first eight months of 2021, it was only able to gross N2.043 trillion during the period under consideration.

Going by the trend, the NNPC is also likely to miss its target revenue of N4.979 trillion, which is its total forecast for the entire year.

The document further showed that despite setting a monthly revenue target of N414.941 billion, the corporation has not been able to meet projection for any of the months.

In January, total revenue raked in by the organisation was N195.624 billion; it was N191.194 billion in February; total revenue in March was N224.589 billion, while in April, it fell to a year low of N156.366 billion.

However, in May, the NNPC recorded a high revenue yield of N320.315 billion; it reduced to N295.396 billion in June; in July it again decreased to N270 billion, while the highest revenue of N389.120 billion so far recorded in the year was in August.

Oil prices which were on their all-time low last year have picked up since the beginning of 2021 and hit $85 per barrel last week, a situation that should ordinarily mean more money to the corporation’s coffers and the federation account by extension.

Compulsory production cuts by the Organisation of Petroleum Exporting Countries (OPEC) has also negatively impacted Nigeria’s revenue from crude oil , although, Nigeria pumped about 155,000 additional barrels of crude oil per day in September, to hit an average of 1.451 million bpd.

It was a major improvement when compared to the 1.296 million barrels per day produced averagely in the month of August, the 1.385 million bpd in July and the 1.413 million bpd, 1.423 million bpd and 1.376 million bpd produced in the first three quarters of this year.

However, the country has been underperforming in the last few months due to years of underinvestment exacerbated by the shutting down of various assets last year following OPEC decision prompted by the Covid-19 pandemic.

Aside deteriorating facilities, theft and general inefficiency in production, crude grade, Forcados has spent the third of the month on force majeure in addition to the damage to the Nembe Creek Trunk Line, which has severely impaired exports of Bonny Light.

But despite the shortages in crude oil production, Nigeria has officially written the cartel requesting additional barrels, arguing that its baseline of 1.8 million needs to be updated since it was picked at a time the country was pumping very low liquids due to the Niger Delta crisis.

Last month, correspondent reported that out of a possible N1.46 trillion the corporation budgeted as revenue payment to the nation in the first seven months of 2021, it had only been able to remit N349.254 billon as of July ending this year.

The amount was short by N1.115 trillion, according to documents from the national oil company. Whereas, the national oil company projected a monthly remittance of N209.307 billion in 2021, however, a breakdown of the figures showed that its highest remittance this year was a N90.860 billion January payment, while the lowest was in April when it paid nothing into the federation account.

In all, the NNPC is supposed to pay the federation N2.51 trillion this year, but the national oil company now has a remote chance of hitting that target, having not been able to meet even a third of the projections at the end of July.

Aside the N90.8 billion highest payment in January, the NNPC was also only able to remit N64.161 billion in February, N41.1 billion in March, N38.6 billion in May, N47.162 billion in June with the second highest being N67.28 billion in July.

About IWIN

The Independent Energy Watch Initiative (I-WIN), an enterprise of Energy ConServ and the Roundtable for the Growth and Development of Power (RODEP), is an online/web based power sector portal that strives to engage stakeholders and the Nigerian public on topical issues in the power sector.

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