NNPC’s MOFOR shows company saw 314% increase in trading surplus in February ‘21

…National oil company heavily importing all products

Ben Eguzozie, in Port Harcourt

The Nigerian National Petroleum Corporation (NNPC) announced a N39.85 billion trading surplus for February 2021 representing a massive 314.24% leap from the N9.62 billion surplus it recorded in January 2021.

In its February 2021 edition of Monthly Financial and Operations Report (MFOR), it said, trading surplus or trading deficit is derived after deduction of the expenditure profile from the revenue for the period under review.

According to the report, in February 2021, NNPC Group operating revenue as compared to its previous month (January 2021), increased by 35.64% or N152.07 billion to stand at N578.79 billion. Similarly, expenditure for the month increased by 29.21% or N121.83billion to stand at N538.94 billion. The expenditure for the month as a proportion of revenue was 0.93% as against 0.98% the previous month.

Behind all these, the national oil company, though runs four refineries, it remains a heavy importer of all its products, for which the country spends tens of billions of naira in products importation. Nigeria, Africa’s top oil producer, runs an incongruous system in its oil industry. While it has been producing nearly 2 million barrels of crude oil per day since late 2016 – early 2017, it had sold same whole, and turns to import 90 per cent of refined petroleum products.

Its four refineries with nameplate combined capacity of 445,000 bpd have largely operated at sub-optimal capacities for several decades. In the last three-to-four years, all the refiners have remained moribund, producing zero product. The effect had been huge products import by the country.

Mele Kyari said the significant increase in trading surplus is attributed mainly to reconciled accounts by the Corporation’s downstream subsidiary, the Petroleum Products Marketing Company (PPMC), using the Petroleum Products Pricing Regulatory Agency (PPPRA) pricing template. Other factors that boosted the trading surplus figure, according to the Corporation, included the performance of Duke Oil, Nigerian Gas Company (NGC) and Nigerian Gas Marketing Company (NGMC) which recorded robust gains as a result of increased debt collection and cost optimization measures.

Conversely, during the period under review, 54 pipeline points were vandalized representing 50% increase from the 27 points recorded in January 2021. The Warri Area accounted for 50% and Mosimi Area accounted for 39% of the vandalized points while Kaduna and Port Harcourt Areas accounted for 7% and 4% respectively.

Kyari said, NNPC continues to work in collaboration with the local communities and other stakeholders to eliminate the menace of pipeline vandalism.

In the period under review, the Corporation supplied a total of 1.41bn litres of Premium Motor Spirit (petrol) translating to 50.52m litres/day.

In terms of natural gas offtake, commercialization and utilization, out of the 206.05Billion Cubic Feet (BCF) produced in February 2021, a total of 133.06BCF was commercialized consisting of 40.15 BCF and 92.91 BCF for the domestic and export market respectively.

This translates to a total supply of 1,433.75Million Standard Cubic Feet Per Day (mmscfd) of gas to the domestic market and 3,318.25mmscfd of gas supplied to the export market for the month.

This implies that 64.48% of the average daily gas produced was commercialized while the balance of 35.52% was re-injected, used as upstream fuel gas or flared.

Gas flare rate was 7.67% for the month under review (i.e. 565.52mmscfd) compared with average gas flare rate of 7.12% (i.e. 529.20mmscfd) for the period of February 2020 to February 2021.

The February 2021 NNPC Monthly Financial and Operations Report is the 67^th in the series. It is published in keeping with the Corporation’s commitment to transparency and accountability.