The opacity which previously surrounded operations of the Nigerian National Petroleum Corporation (NNPC) may finally be a thing of the past as the Corporation’s group managing director, Dr. Ibe Kachikwu, has begun a monthly publication of NNPC’s financial and operational reports.
The development follows his earlier pledge to open up the books of the national oil company to the public scrutiny of its provisional financial and operational reports.
The publication which is available on the Corporation’s official website provides an overview of NNPC’s operations across the oil and gas value chain, namely upstream, midstream and downstream as well as the Corporation’s functions on behalf of the federal government for the period of January to August 2015.
The report showed that the sum of N723.82 billion from domestic crude oil and gas sales had been paid to the federation account from January to August 2015 as Naira proceeds.
It also showed that a total of $607.8 million had been paid so far to the Federation Accounts Allocation Committee (FAAC) in the year 2015 from sales of export crude oil and gas as dollar proceeds.
A further breakdown of the report indicates that although the total export crude oil and gas receipt for the period of January to August 2015 was $3.420 billion, only $0.61 billion of the receipt was remitted to the federation account as dollar proceeds while the balance of $2.815 billion was used to fund the Joint Venture (JV) Cash Call for the period.
The report notes that the receipts witnessed a sharp decline of more than 67 per cent from September 2014, when the receipt was at its peak, to July 2015 with dire consequences to the federation.
The NNPC noted that the continued decline in oil price led to insufficient cash available to meet monthly JV Cash Call obligations of about $615.8m as appropriated by the National Assembly.
“To mitigate this effect, NNPC was compelled to sweep all the export receipts to JV Cash Call funding, implying a zero dollar proceed remittance to the federation account since the month of April 2015,” a statement yesterday by the NNPC spokesman, Ohi Alegbe explained.
Meanwhile, the report provides detailed and unprecedented statistical insight into crucial aspects of the Corporation’s activities, ranging from national crude oil and natural gas production, lifting and utilization, refinery operations and petroleum products supply and distribution, to NNPC budget performance report and federation crude oil and gas revenue.
Illustrated with tables, graphs and charts, the report vividly throws light on aspects of NNPC’s operations that were once opaque. It showed that for the period, a total volume of 439 million barrels of crude oil was lifted.
Also, issues like the status of the JP Morgan foreign account, management and custody of revenue from crude oil sales, actual production capacity of the refineries, dollar accruals to NNPC/FGN from export crude oil and gas, as well as receipts and payments were laid bare.
The report further listed incessant pipeline breakages nationwide leading to leakages and huge accounting losses, losses occasioned by crude and products’ theft and low capacity utilization of the refineries as some of the challenges facing the Corporation.
It also listed restricting JV funding and reducing cash call, improved retail profitability and expansion of crude marketing as some of the initiatives it is currently undertaking.