The total loss of the Nigerian National Petroleum Corporation from January to November 2015 has been put at N255.28bn, as against N240.98bn which it recorded from January to October in the same year.
An analysis of the corporation’s financial report for October and November 2015 showed a difference of N14.3bn between the two months.
The oil firm’s latest financial report also showed that the NNPC had made dollar payments totalling $607.8m to the Federal Accounts and Allocation Committee from January to November 2015.
On the naira payments to the Federal Government, the corporation said, “The sum of N933.1bn for domestic crude oil and gas and other receipts was paid to the Federation Account from January to November 2015.”
The report further stated that the country’s refineries operated at zero capacity utilisation in the month of November.
It also stated, “The group operating revenues after subsidy for the months of October and November 2015 were N173.56bn and N155.10bn, respectively. This represents 56.72 per cent and 50.68 per cent, respectively of monthly budget. Similarly, operating expenditures for the same periods were N185.78bn and N169.39bn, respectively, which also represented 69.55 per cent and 63.42 per cent, respectively of budget for the months.
“Operating deficits of N12.22bn and N14.29bn for October and November 2015, respectively were attained as against monthly budgeted surplus of N38.91bn. (The) 59.63 per cent of YTD (year-to-date) NNPC deficit of N255.278bn is mainly accounted for by claimable pipeline repairs/management cost of N95.37bn and crude and product losses of N56.68bn due to vandalised pipelines.”
On the performance of refineries, the report stated that the total crude processed by the three facilities for the month of November 2015 was zero.
The refineries are Warri Refining and Petrochemical Company, Port Harcourt Refining Company and Kaduna Refining and Petrochemical Company.
The NNPC said the total export proceeds of $402.55m were recorded in November, 2015 with proceeds from crude oil export sales amounting to $296.99m or 73.78 per cent of the dollar payment compared with 72.97 per cent contribution in previous month (October, 2015).
It stated that gas export sales and Nigeria Liquified and Natural Gas feedstock amounted to $105.53m, which was 26.22 per cent contribution compared with 18.97 per cent contribution in the prior month of October 2015.
“The remaining $0.03m was attributable to other dollar denominated receipts by the corporation and a total of $607.8m has been paid so far to FAAC in the year 2015 from sales of export oil and gas,” it said.
The national oil firm explained that the downward trend in global oil prices had continued to affect the energy industry worldwide with average crude price of $44.29 per barrel on dated Brent benchmark throughout November, 2015.
Meanwhile, only two of the nation’s refineries in Kaduna and Port Harcourt met the 90-day fast-track ultimatum, which elapsed on Thursday, December 31, 2015.
The Minister of State for Petroleum Resources and Group Managing Director of the NNPC, Dr. Ibe Kachikwu, had recently given the 90-day ultimatum for the revival of the refineries.
Three of the nation’s four refineries in Warri, Kaduna and Port Harcourt had resumed production of refined petroleum products in July after undergoing rehabilitation, but they were shut down in August, September and October, respectively.
The Kaduna refinery and one of the two plants in Port Harcourt have, however, come back on stream.
The Kaduna refinery, which has a capacity of 110,000 barrels per day, had two weeks ago resumed production, almost four months after it was shut down as a result of lack of crude supply caused by the repair of the pipeline pumping crude to the plant.
The 150,000bpd refinery in Port Harcourt was said to have started production on Sunday, while the 60,000 bpd refinery, the nation’s oldest refinery, remained shut down as of December 31.
The 125,000 bpd Warri refinery, which is a complex refinery with an associated, but now moribund, petrochemical plant designed to produce polypropylene and carbon black, has yet to come back on stream.
The Managing Director, Port Harcourt Refinery Company Limited, Mr. Bafred Enjugu, told our correspondent on Thursday that “we have resumed production since the morning of December 27, 2015.” But no further details were given.
Another source at the Port Harcourt refinery, who confirmed to our correspondent that the plant resumed operation on Sunday, said, “We are streaming area by area. We started with Area 1. We started going to storage of refined products since Sunday. But the old one is not yet up.”
The PHRC MD had last week told our correspondent that the refinery operated until October 13 when they had a blip with their main column, adding that it had been fixed all locally and they were in pre-commissioning mode with start up to follow.
The nation’s refineries in Warri, Kaduna and Port Harcourt have a combined installed capacity of 445,000 barrels per day.
Kachikwu had recently said in the next 24 months, Nigerians would see a positive dramatic turn in the refinery model in the country.
The NNPC had in August cancelled the contract for the delivery of crude oil to the nation’s refineries in Warri, Port Harcourt and Kaduna, due to exorbitant cost and inappropriate process of engagement.
Brent Crude Oil Extends Gain to $86.66 a Barrel Amid Tight Supply
Tight global oil supply pushed Brent crude oil, against which Nigeria oil is priced, to a multi-year high of $86.66 per barrel on Monday at 3:30 pm Nigerian time.
Oil price was lifted by rising fuel demand in the United States and tight global supply as economies recover from pandemic-induced slumps.
“The global energy supply crunch continues to show its teeth, as oil prices extend their upward march this week, a result of traders pricing in the ongoing rise in fuel demand – which amid limited supply response is depleting global stockpiles,” said Louise Dickson, senior oil markets analyst at Rystad Energy.
Goldman Sachs on the other hand is predicting a further increase in Brent crude oil to $90 a barrel, citing a strong rebound in global oil demand due to switching from gas to oil. This the bank estimated may contribute about 1 million barrels per day to global oil demand.
The investment bank said it expects oil demand to reach around 100 million barrels per day as consumption in Asia increases after the devastating effect of COVID-19.
“While not our base-case, such persistence would pose upside risk to our $90/bbl year-end Brent price forecast,” Goldman said in a research note dated Oct. 24.
Earlier this month, the Organization of the Petroleum Exporting Countries, Russia and their allies, known as OPEC+ agreed to continue increasing oil supply by 400,000 bpd a month until April 2022 despite calls for an increase in global oil supplies.
The decision bolstered the price of Brent crude oil above $84 per barrel and expected to push the price even further to $90 a barrel. Low global oil supply amid rising demand for crude oil will continue to support oil prices in the near term.
“Despite the recent power cuts and impacts to industrial activity in China, oil demand is likely instead supported by switching to diesel powered generators and diesel engines in LNG trucks, as well as by a ramp up in coal production,” Goldman Sachs stated.
U.S. and Ghana Inaugurate New $64.7 Million Energy Infrastructure Investment at Pokuase
U.S. Ambassador to Ghana Stephanie Sullivan joined the President of Ghana H.E. Nana Akufo-Addo and other Ghana government officials to formally inaugurate the Pokuase Bulk Supply Point (BSP) in Accra today. The U.S. Millennium Challenge Corporation (MCC) funded the $64.7 million (GH₵ 391.9 million) electrical infrastructure project under the Ghana Power Compact.
“The Pokuase Bulk Supply Point represents sustainable infrastructure investment by the United States with Ghana that will benefit hundreds of thousands of Ghanaians now and into the future,” remarked Ambassador Sullivan at the inaugural event. “It will help deliver more reliable power to the people, places, and businesses of Accra that drive increased economic activity benefitting families, businesses, and communities.”
This represents a flagship investment under the Millennium Challenge Corporation’s Ghana Power Compact. The Pokuase BSP will reduce outages in the power system, help stabilize voltages, and improve the quality and reliability of power supplied to the northern parts of the capital city of Accra. It will also reduce technical losses in the power transmission and distribution system, contributing to the financial viability of the Electricity Company of Ghana (ECG) and the Ghana Grid Company (GRIDCo) in the long term. The Pokuase BSP is now the largest-capacity BSP in Ghana at 580 megavolt amperes (MVA) and will directly benefit 350,000 utility customers.
The Government of Ghana implemented the project through the Millennium Development Authority (MiDA). MiDA formally handed over the new power substation to ECG and GRIDCo in today’s ceremony.
The Pokuase BSP is the first major construction project to be completed under the Ghana Power Compact. The $316 million compact is helping the Government of Ghana improve the power sector through investments that will provide more reliable and affordable electricity to Ghana’s businesses and households. The compact is also funding a BSP at Kasoa and two primary substations at Kanda and Legon, in addition to other power sector investments, energy efficiency programs, and women’s empowerment programs within the power sector. The compact program will officially close on June 6, 2022.
Oil Falls Slightly as China Steps in to Curb Rising Coal Prices
Global oil prices moderated slightly on Wednesday following the Chinese government’s decision to curb high coal prices and ensure coal mines function at maximum capacity.
Brent crude, against which Nigerian oil is priced, dropped to $83.98 per barrel at 11:00 am Nigerian time. While the U.S. West Texas Intermediate (WTI) crude fell by 80 cents or 1 percent to $81.20 a barrel.
“China is planning to take steps to combat the steep rises in the domestic coal market … which could put considerable pressure on the coal price there and reverse the fuel switch to oil,” Commerzbank said.
Prices for Chinese coal and other commodities slumped in early trade, which in turn pulled oil down from an uptick earlier in the day.
China’s National Development and Reform Commission said on Tuesday it would bring coal prices back to a reasonable range and crack down on any irregularities that disturb market order or malicious speculation on thermal coal futures. read more
Oil markets in general remain supported on the back of a global coal and gas crunch, which has driven a switch to diesel and fuel oil for power generation.
But the market on Wednesday was also pressured by data from the American Petroleum Institute industry group which showed U.S. crude stocks rose by 3.3 million barrels for the week ended Oct. 15, according to market sources.
That was well above nine analysts’ forecasts for a rise of 1.9 million barrels in crude stocks, in a Reuters poll.
However, U.S. gasoline and distillate inventories, which include diesel, heating oil and jet fuel, fell much more than analysts had expected, pointing to strong demand.
Data from the U.S. Energy Information Administration is due later on Wednesday.
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