Efficiency, cost optimisation, contract renegotiation help NNPC cut 2019 losses by 99.7%
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Ben Eguzozie
- Losses: 2019 = N1.7bn; 2018 = N803bn
- But administrative expenses still high at N696bn
- Refineries continue with perennial losses
State-owned Nigerian National Petroleum Corporation (NNPC) says it has reduced its huge financial losses by 99.7 per cent to N1.7 billion in 2019, against the N803 billion it incurred in 2018. The company gave this in its just-released 2019 audited financial statement.
According to the corporation’s spokesman, Kennie Obateru, quoting the NNPC chief financial officer (CFO), Umar Ajiya, the 2019 audited financial statement was concluded five months after the release of the 2018 audited account of the company. He said the report will be published on the corporation’s website for all to see in keeping with management’s commitment to transparency and accountability, and in consonance with the principles of the Extractive Industries & Transparency Initiative (EITI) of which the NNPC is a partner.
However, while the NNPC’s general administrative expenses in the 2019 audited financial statement (AFS) dipped by 22 per cent from 2018 figure of N894 billion, many industry experts said it is still high at N696 billion in the year under review.
Ajiya said a majority of the NNPC subsidiaries posted improved performances, including Nigerian Petroleum Development Company Limited (NPDC), which recorded N479 billion profit in 2019 compared to N179 billion in 2018, representing a 167 per cent increase; Integrated Data Sciences Limited (IDSL), which recorded N23 billion profit in 2019 against N154 million in the previous year, representing 14,966 per cent increase; Petroleum Products Marketing Company (PPMC) posted N14.2 billion profit in the year under review (2019), against N9.3 billion in the previous year (2018), representing 52 per cent increase.
Meanwhile, the four refineries, with a nameplate production capacity of 445,000 barrels per stream day (bpsd) managed by NNPC have continued in their perennial losses. Each of them maintained the same level of losses as in 2018.
But Ajiya said the losses “will reduce significantly in 2020, due to cost optimization drive.”
He explained that NNPC’s improved performance in the 2019 financial year was driven mainly by cost optimization, contracts renegotiation and operational efficiency.
“The 2019 AFS goes further to demonstrate our unwavering commitment to the principle of transparency, accountability and performance excellence (TAPE); while the outlook for 2020 looks promising, in view of the management’s strong drive to prune down running cost and grow revenues,” he said.
Mele Kyari, NNPC’s group managing director, had promised to sustain the publication of the corporation’s audited financial statement as part of efforts to deepen transparency and accountability; and keep stakeholders abreast of NNPC operations.