There are indications that the earnings of Nigeria Liquefied Natural Gas Limited, NLNG, in 2016, may dip by as much as $6 billion over 50 per cent, compared to 2014 earnings.
The NLNG Managing Director, Babs Omotowa, who spoke with the Nation,said that the realities in the global oil and gas, especially in Nigeria, have adversely affected oil and gas operations.
Omotowa said in 2011, when crude oil sold for as much as $140 per barrel, NLNG earned over $11 billion, but this year, considering low oil price and some local challenges confronting Nigeria’s oil and gas industry, anticipated earnings will be about $5 billion.
“Low oil price has affected our revenue significantly because gas price follows oil price. Compared to 2014 when oil price was about $140 per barrel when we had over $11 billion, this year we might be earning about $5 billion. That is clearly more than 50 per cent reduction in revenue,” he said.
“Oil price fluctuation is always expected, so from 2012 we had already started to plan in anticipation that oil and gas prices will come down. Since 2012 we had anticipated price crash and we have been working towards it.”
“We have been able to take action to minimise our cost because while we cannot control oil price, we can control our cost, and improve our efficiencies.Even though we are more than 50 per cent lower in revenue, we will still be able to deliver a net income after tax of close to $6 billion at the end of the year.”
Speaking on the impact of the renewed attacks on oil facilities by the Niger Delta militants, Omotowa said militancy affects the oil and gas industry in Nigeria and not just the NLNG.
He said the development of the region would help in significantly reducing insurgency, urging stakeholders to collaborate to achieve that objective with the government leading the way.