NNPC Remits $49m to Federation Account After 14 Months

The Nigerian National Petroleum Corporation, NNPC, weekend disclosed that it paid $48.99 million to the Federation Account in two months, June and July 2016.

The NNPC, in its Monthly Financial and Operations Reports, revealed that the payment was after its failure to make any dollar remittances to the Federation Account Allocation Committee, FAAC, for 14 months, from April 2015 to May 2016.

This, according to the report, is mainly due to declining crude oil earnings, which led to the NNPC transferring all dollar proceeds from crude oil and gas export sales to payments for Joint Venture Cash Call.

Specifically, the NNPC’s last foreign exchange (dollar) remittance to the Federation Account was in March 2015, when it paid $184.978 million to FAAC.

For the month of June 2016, the report pointed out that the NNPC remitted $4.866 million, while $44.125 million was remitted in the month of July 2016.

In addition, the report noted that in a 12-month period, from August 2015 to July 2016, only the amount remitted for June and July 2016, $48.99 million, had been paid into the Federation Account, while of a total NNPC crude oil and gas export sales proceed of $3.212 billion, $3.163 was utilised for Joint Venture cash call funding.

Giving further breakdown, the NNPC report said, “Total export revenue of $226.47 million was recorded in June, 2016 representing 21 per cent increase relative to preceding performance. Crude oil export sales contributed $153.011 million (or 67.56 per cent) of the dollar transactions compared with $68.89 million contribution in previous month. Also the export gas sales amounted to $73.46 million in the month of June, 2016. Twelve month crude oil and gas transactions indicate that crude oil and gas worth $3.254 billion was exported.

“Total export proceeds of $212.25 million were recorded in July 2016 as receipt. Contribution from crude oil amounted to $145.51 million while gas proceeds was $64.21 million and miscellaneous receipt amounting to $2.53 million.

Continuing, the NNPC said, “The poor performance is attributable to upsurge in attack and sabotage of oil facilities in the Niger Delta. At Forcados Terminal alone about 300,000 barrels of oil per day, bopd, were shut in since February 2016 following force majeure declared by Shell Petroleum Development Company, SPDC.

“A number of crude oil liftings were deferred until the repair is completed. Other major terminal affected by the renewed spate of vandalism includes Bonny, Usan and Qua Ibo terminals.

“Total export crude oil and gas receipt for the period of August 2015 to July 2016 stood at $3.21 billion. Out of which the sum of $3.16 billion was transferred to Joint Venture (JV) cash call in line with 2015/2016 approved budget and the balance of $0.49 billion was paid to Federation Account.

“However, this amount falls short of the calendarised appropriated amount of $615.80 million and $712.46 million for 2015 and 2016 respectively. This is due to worsening production and fall in crude oil price.”

Remits N98.8bn in two months

On the other hand, the report added that the NNPC remitted N98.844 billion in the months of June and July to the Federation Account from the domestic sales of crude oil and gas.

Specifically, N62.288 billion and N36.556 billion were remitted by the NNPC to the Federation Account in June and July 2016 respectively.

To this end, the report stated that out of total earnings of N993.33 billion from domestic crude oil and gas sales recorded from August 2015 to July 2016, N111.4 billion was utilised for Joint Venture cash call (naira only) payments, while N881.93 billion was remitted to the Federation Account in the 12-month period.