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Five multinationals to remit $1bn oil proceeds in July – NNPC

Five multinationals to remit $1bn oil proceeds in July – NNPC

A total of $1.02bn for April 2021 domestic crude oil sales by five multinational oil companies operating in the upstream sector will be paid in July 2022, the Nigerian National Petroleum Company Limited has said.

The five oil firms include Chevron Nigeria Limited, Mobil Producing Nigeria, Shell Petroleum Development Company, Total Exploration and Production Nigeria, as well as First Exploration and Production.

Data sourced from NNPC Limited indicated that $237.7 million for 2.2 million barrels of crude oil would come from Chevron, while $517.1 million for 4.75 million barrels of oil would be paid by Mobil.

Shell and Total would remit $100.1 million and $99. million for 948,352 and 949,222 barrels of oil respectively, according to figures obtained from NNPC.

For First E&P, a total of $72.1 million for 650,058 barrels of crude oil would come from the oil firm this July for products sold in April 2022.

In its remarks on the expected payments, the national oil firm explained that the funds were for “April 2022 domestic crude oil payable in July 2022 by NNPC in line with the 90 days payment terms.”

NNPC described the five companies as its joint venture partners. The IOCs had repeatedly complained of their inability to produce more crude oil for export due to the massive theft of the product by criminals.

Read also: Troops recover N2.7bn stolen crude in two weeks, destroy 109 illegal refining sites

In its outlook for Nigeria’s energy sector, CardinalStone Partners Limited, an investment banking group has predicted Nigeria’s oil sector will remain in trenches in the second half of 2022.

The analysts in their 2022 Mid-Year Outlook themed: ‘Same Challenges, New Shocks’ also noted that pre-election year concerns and fears of negative pass-through to inflation will likely limit the magnitude of currency adjustment made at the official market in the current year.

“In our last communique, we projected a N10.7 trillion fiscal deficit (5.3% of the GDP) for 2022. Our prognosis remains unchanged as elevated subsidy payment continues to erode fiscal space,” CardinalStone said in its report.

Analysts at CardinalStone noted that there was no transfer in Nigeria’s Federation Account between January and May 2022 compared to an average of N45.2 billion in 2021), despite a price-driven 32.7 percent accretion in monthly gross oil revenue.

“The lack of transfers reflected sustained increases in subsidy payments, which totalled N1.3 trillion (67.2% of gross oil revenue) in the review period and suggested an annual subsidy burden of N3.1 trillion,” CardinalStone said.

It added, “this may have influenced the government’s decision to float a supplementary budget of N2.6 trillion, given the apparent inadequacy of its prior provision of N450.0 billion”.

“By our assessment, assuming a $10 increase in oil prices, a 100,000 bbl/d decline in oil production is likely to cap the associated increase in net revenue to the Federal Government to only 3.1% (vs 10.0% if oil production was constant),” CardinalStone concluded.