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Seplat Boosts Gas Production as Oil Export Suffers

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Gas-Pipeline
  • Seplat Boosts Gas Production as Oil Export Suffers

A major Nigerian independent oil and gas exploration and production firm, Seplat Petroleum Development Company Plc, said its gas revenues increased by 37 per cent last year, even as its oil production was curtailed by the shutdown of the Forcados terminal.

The company attributed the increase in its gas volume to the new Oben gas processing facility installed mid-year 2015, with a processing capacity of 150 million standard cubic feet per day.

The Chairman, Seplat Petroleum Development Company, Dr. Ambrose Orjiako, said on the sidelines of the company’s Annual General Meeting in Lagos on Thursday that the shut-in of the Trans Forcados Pipeline, the main route for the company’s exports, impacted the volume of oil production amid low prices.

“During this period, we quickly adapted and started exporting some of our production through the Warri refinery. Another thing we did was to quickly expedite action on our gas development and commercialisation strategy, and that meant that quite a lot of revenue now came from gas,” he said.

Orjiako said the company was able to increase its gas processing capacity to over 500 million scfpd and gas production to 300 million scfpd.

The company’s gas revenues increased to $105.5m last year, compared to $76.9m in 2015, driven by a 19 per cent increase in the average realised gas price to $3.03 per 1000 scf from $2.55/mscf in 2015, and an 11 per cent increase in working interest production to 95 million scfpd from 86 mmscfd in 2015.

Seplat said the shut-in and declaration of force majeure at the Forcados terminal by the operator, Shell, saw its average daily production fall from 52,000 barrels of oil equivalent per day by mid-February 2016 to 25,877 boepd by year end.

It said oil revenue fell by 55 per cent from $570m in 2015 to $254m in 2016, while the total volume of crude lifted in the year was 3.422 million barrels compared to 8.129 million barrels in 2015.

The firm explained that the decline in its gross profit to $72m from $249m in 2015 reflected the shut-in of the Forcados terminal, resulting in lower production, lower oil price realisation and higher costs associated with the alternative export route to the Warri refinery.

It stated that it posted an operating loss of $158m in 2016, compared to an operating profit of $158m a year earlier, adding that included in the loss was a charge of $101m relating to unrealised foreign exchange losses principally on amounts owed by its joint venture partner, the Nigerian Petroleum Development Company.

The Chief Executive Officer, Seplat, Mr. Austin Avuru, said, “While force majeure at the Forcados terminal has materially affected our oil production, I am particularly pleased to see the growth in our gas business, which in 2016 exceeded the $100m revenue milestone demonstrating its robustness and providing a solid base from which to grow.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Fall in Economic Activities in Nigeria Created N485.51 Billion Fiscal Deficit in January -CBN

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Dollar thrive in Nigeria

The drop in economic activities in Africa’s largest economy Nigeria led to a N485.51 billion fiscal deficit in January, according to the latest data from the Central Bank of Nigeria (CBN).

In the monthly economic report released on Friday by the apex bank, the weak revenue performance in January 2021 was due to the decline in non-oil receipts following the lingering negative effects of COVID-19 pandemic on business activities and the resultant shortfall in tax revenues.

In part, the report read, “Federally collected revenue in January 2021 was N807.54bn.

“This was 4.6 per cent below the provisional budget benchmark and 12.8 per cent lower than the collection in the corresponding period of 2020.

“Oil and non-oil revenue constituted 45.4 per cent and 54.6 per cent of the total collection respectively. The modest rebound in crude oil prices in the preceding three months enhanced the contribution of oil revenue to total revenue, relative to the budget benchmark.

“Non-oil revenue sources underperformed, owing to the shortfalls in collections from VAT, corporate tax, and FGN independent revenue sources.

“Retained revenue of the Federal Government of Nigeria was lower-than-trend due to the lingering effects of the COVID-19 pandemic.”

“At N285.26bn, FGN’s retained revenue fell short of its programmed benchmark and collections in January 2020, by 41.3 per cent and 7.5 per cent respectively.

“In contrast, the provisional aggregate expenditure of the FGN rose from N717.6bn in December 2020 to N770.77bn in the reporting period, but remained 14.4 per cent below the monthly target of N900.88bn.

“Fiscal operations of the FGN in January 2021 resulted in a tentative overall deficit of N485.51bn.”

The report noted that Nigeria’s total public debt stood at N28.03 trillion as of the end-September 2020, with domestic and external debts accounting for 56.5 percent and 43.5 percent, respectively.

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Economy

NNPC Supplies 1.44 Billion Litres of Petrol in January 2021

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The Nigerian National Petroleum Corporation (NNPC) supplied a total of 1.44 billion litres of Premium Motor Spirit popularly known as petrol in January 2021.

The corporation disclosed in its latest Monthly Financial and Operations Report (MFOR) for the month of January.

NNPC said the 1.44 billion litres translate to 46.30 million litres per day.

Also, a total of 223.55Billion Cubic Feet (BCF) of natural gas was produced in the month of January 2021, translating to an average daily production of 7,220.22 Million Standard Cubic Feet per Day (mmscfd).

The 223.55BCF gas production figure also represents a 4.79% increase over output in December 2020.

Also, the daily average natural gas supply to gas power plants increased by 2.38 percent to 836mmscfd, equivalent to power generation of 3,415MW.

For the period of January 2020 to January 2021, a total of 2,973.01BCF of gas was produced representing an average daily production of 7,585.78 mmscfd during the period.

Period-to-date Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and Nigerian Petroleum Development Company (NPDC) contributed about 65.20%, 19.97 percent and 14.83 percent respectively to the total national gas production.

Out of the total gas output in January 2021, a total of 149.24BCF of gas was commercialized consisting of 44.29BCF and 104.95BCF for the domestic and export markets respectively.

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Economy

NNPC Says Pipeline Vandalism Decrease by 37.21 Percent in January 2021

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The Nigerian National Petroleum Corporation (NNPC) said vandalisation of pipelines across the country reduced by 37.21 percent in the month of January 2021.

This was disclosed in the January 2021 edition of the NNPC Monthly Financial and Operations Report (MFOR).

The report noted that 27 pipeline points were vandalised in January 2021, down from 43 points posted in December 2020.

It also stated that the Mosimi Area accounted for 74 percent of the total vandalised points in Janauray while Kaduna Area and Port Harcourt accounted for the remaining 22 percent and 4 percent respectively.

NNPC said it will continue to engage local communities and other stakeholders to reduce and eventually eliminate the pipeline vandalism menace.

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