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NNPC cuts spending by N4.81bn in one month

…pushes trading surplus to N13.43bn


  • Crude oil, gas export sales hit $108.84m



The Nigerian National Petroleum Corporation (NNPC) cut its monthly expenditure (spending) by 1.16% or N4.81 billion in November 2020 and pushed the Corporation’s trading surplus to N13.43 billion for the month.


The surplus, contained in the November 2020 edition of the NNPC Monthly Financial and Operations Report (MFOR), is up by 54% when compared to the N8.71 billion surplus recorded in October 2020.


The trading surplus or trading deficit, according to a statement by the Group General Manager, Group Public Affairs Division of the Corporation, Dr. Kennie Obateru, is derived after deduction of the expenditure profile from the revenue in the period under review.


The report indicated that in November 2020, NNPC Group’s operating revenue as compared to October 2020, decreased slightly by 0.02% or N90 million to stand at N423.08 billion. Similarly, expenditure for the month decreased by 1.16% or N4.81 billion to stand at N409.65 billion leading to the N13.43 billion trading surplus. Overall, expenditure as a proportion of revenue was 0.97 in November 2020 as against 0.98 in October 2020.


The 54% increase in trading surplus in the November 2020 MFOR is primarily ascribed to the substantial decrease in expenditure from the Nigeria Gas Company (NGC) due to cost reduction in overheads, coupled with 38% reduction in NNPC Corporate Headquarters deficit.


In addition, the NNPC Group’s surplus was bolstered by the noticeable improved profits for additional engineering services rendered by the Nigerian Engineering and Technical Company (NETCO) and  increased revenue from import activities posted by Duke Oil Incorporated.


These healthy performances dominated the positions of all other NNPC subsidiaries to record the Group surplus. The report also indicated that export sales of crude oil and gas for the month stood at $108.84 million, making a 70.33% increase compared to the last month.


Crude oil export sales contributed $73.09 million (67.15%) of the dollar transactions compared with $12.38 million contribution in the previous month; while the export gas sales amounted to $35.75 million in the month. The total crude oil and gas export for the period of November 2019 to November 2020 stood at $2.89 billion.


In the Gas Sector, a total of 222.34 Billion Cubic Feet (BCF) of natural gas was produced in the month under review, translating to an average daily production of 7,411.52 Million Standard Cubic Feet per Day (mmscfd). For the period November 2019 to November 2020, a total of 3,004.06BCF of gas was produced, representing an average daily production of 7,642.69mmscfd during the period.


Out of this volume, production from Joint Ventures (JVs) accounted for 67.29%, Production Sharing Contracts (PSCs) accounted for 19.97%, while the Nigerian Petroleum Development Company (NPDC) accounted for 12.74%. A further breakdown showed that a total of 137.41 BCF of gas was commercialized, consisting of 39.99BCF and 97.42BCF for the domestic and export market respectively.


This translates to a total supply of 1,332.82 mmscfd of gas to the domestic market and 3,247.44 mmscfd of gas supplied to the export market for the month.


This implies that 62.55% of the average daily gas produced was commercialized while the balance of 37.45% was re-injected, used as upstream fuel gas or flared. Gas flare rate was 7.89% for the month under review, translating to 577.39 mmscfd.


A total of 789mmscfd was delivered to gas-fired power plants in November 2020 to generate an average power of about 3,358MW compared with October 2020 when an average of 750mmscfd was supplied. In the Downstream Sector, 1.725 billion litres of white products were sold and distributed by the Petroleum Products Marketing Company (PPMC), a subsidiary of the NNPC, in November 2020, compared with over 1.224 billion litres in the month of October 2020.


This comprised 1.723  billion litres of Premium Motor Spirit, 2.13 million litres of Automotive Gas Oil (AGO) also known as diesel and 0.33 million litres of Dual Purpose Kerosene. Total sale of white products for the period November 2019 to November 2020 stood at 17.031 billion litres and PMS accounted for 16.911 billion litres or 99.29%.


In monetary terms, a sum of N226.08 billion was made on the sale of white products by PPMC in the month of November 2020 compared to N158.04 billion sales in October 2020.


Total revenues generated from the sales of white products for the period November 2019 to November 2020 stood at N2.034 trillion, where PMS contributed about 99.09% of the total sales with a value of over N2.015 trillion. The November 2020 MFOR is the 64th in the series which began in August 2015.


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