The Nigerian National Petroleum Corporation (NNPC) suffered another operating loss in June, after recording a N274 million surplus in May 2016.
The deficit position resulted from a decline in refining capacity which fell to a new low for the Corporation, N26.505 billion in June despite paying N55.96 billion into the federation account.
According to NNPC’s June financial statement, it lost N4.69 billion to the country’s under-performing refineries. Warri and Port Harcourt refineries produced at 24.4 per cent and 11.8 per cent capacity respectively, while Kaduna Refinery produced at zero per cent, in the month of June.
The report indicates “a deficit of N26.51 billion as against trading surplus of N274 million reported in May, 2016. This trading surplus does not represent net profit as there are other expenses that should ordinarily have been captured.”
“The deficit in the month of June 2016 was majorly due to decrease in revenue generation as a result of decline in PPMC petroleum products sales by 13.30 per cent or N14.9 billion and increase in products distribution costs.
“Also, June 2016 operations witnessed the major impact of incessant vandalism during the month with more than 261 points blown up by militants.
“In NPDC, a substantial portion of crude oil sales for the month estimated to be in excess of the deficit could not be realised due to Force Majeure declared by SPDC owing to attack on 48-inch Forcados export line.”
NNPC attributed its poor performance to a rise in vandalism in the Niger Delta region. “Poor performance is attributable to upsurge in attack and sabotage of oil facilities in the Niger Delta.
“At Forcados Terminal alone, about 380,000bopd were shut in since February 2016 following Force Majeure declared by SPDC as a number of crude oil liftings were deferred until repairs were completed.
“Other major terminals affected by the renewed spate of vandalism include Bonny, Usan and Que Ibo terminals. Total export crude oil and gas receipt for the period of July 2015 – June 2016 stood at $3.42 billion.”
Meanwhile, NNPC said work is ongoing to run the refineries at a minimum of 70 per cent capacity utilisation within the next six to eight months.
“Co-locating smaller but cost-efficient modular refineries within the existing refineries’ premises to boost the nation’s refining capacity from 445,000 barrels per day to 650,000,” it said.
