The Nigerian National Petroleum Corporation (NNPC) recorded N351 billion revenue surplus in August as it remitted N872 billion instead of the planned N521 billion.
Group Managing Director of NNPC, Mele Kyari stated this Thursday at the 2020 budget performance presentation and 2021 budget defence before the House of Representatives Joint Committees on Petroleum Upstream, Downstream, and Gas.
Kyari reminded lawmakers that without the passage of the Petroleum Industry Bill (PIB) no one will invest in the country because the level of uncertainty is so enormous that her partners cannot put in their money.
Responding to concerns expressed by a member of the Joint Committees, Nicholas Ossai the NNPC Boss assured the National Assembly of transparency and accountability.
He said: “We need to see that every data we have is available to this National Assembly, we are not hiding anything. On details of the gas project, we have a track of how much spent on all projects and we will provide all.
“On details of pipeline security we have 5000 kilometers of the pipeline we have 13 fuel depots, apart from two pipelines, others are not active. We cannot flow products into these lines, because they have aged. But the real reason is that the level of vandalism activities on these lines is gross and profound.
“When I came on board we sought the support of investigative agencies to contain this. In 2019, from January to June we’ve lost petroleum products close to N43 billion in just one night in six months stolen and that level of loss has come to less than N3 billion.
“On the PMS under-recovery, we deregulated PMS pricing regime in March, in January February and part of March, the market was not regulated, in course of the realities of Covid 19, we do no longer need appropriation for PMS under-recovery because PMS will pay for itself there’s no subsidy on it.
“We’re not avoiding conversation around refinery rehabilitation. We deliberately shut down all three refineries, it doesn’t make any further sense to continue to operate them because we are unable to supply crude oil to the refinery, it’s impossible to run this pipeline at their optimum capacity, for you to run Kaduna and Warri refineries, you need to deliver at 170,000 barrels of oil per day into this line will be able to operate at least 70 percent of their capacity.
“The lines as a result of acts of a vandal that anytime we attempt to form more than 10,000 barrels per day, the line gives up so it can’t deliver more than 110 and therefore you cannot operate Kaduna and Warri refinery with the current structure. We will rehabilitate these refineries, fix the pipeline by the BOT process that we’ve started so they can operate at an optimal level instead of losing both in terms of the value they create and also crude stolen on the pipeline and we think the right to do is shutdown”.
While giving a summary of the Corporation’s financials, MKyari stated that: “For the gross revenue, for the full year plan we have a total of N2.5 trillion planned, however, the plan from January to September was N1.8 trillion
that we were able to bring into the coffers of the government.
“Joint venture cost recovery we planned N1.5 trillion for the year to spend on JV operations, even though COVID-19 impacted our operations we were still able to deliver below cost N816 billion.
“For other federally funded projects, dump gas, we planned 424 as at August we had slightly exceeded budget but not for a full-year plan but I’m sure we will finish the year within budget. For gas infrastructure projects development we operated below budget as indicated in the charts, N15 billion below budget.
“On frontier explorations, from the budget of 50 billion, we were able to work within that budget for the planned period. For refinery rehabilitation, the initial funding will come from the Federal Government while subsequent funding will be sourced from our financiers.
On the current crude oil production, Kyari said: “In terms of production, our estimate for production is 1.88 million barrels per day away from the 2.3 initially down in 2020 budget.
“As I speak to you now our performance is 1.863 so we’re very close and within budget and this also tells us that we’re going to meet our commitment to our partners in OPEC. What’s crucial is to see where these productions are coming from. For exploration in a situation where we were confronted with COVID-19, exploration activities were the first to be hit in the oil and gas industry”.
The lawmakers on the other hand asked NNPC to open up its books on various expenditures incurred on Joint Venture Cooperation (JVC), pipeline maintenance, rehabilitation of refineries, among others.
Chairman, Committee on Petroleum Resources (Upstream), Musa Adar, applauded the NNPC management for presenting the Corporation’s budget for the first time to the Parliament and its contribution towards the introduction of the PIB.
Adar said: “Going by what has happened initially most of the problems comes from NNPC, they see PIB as something that could undermine them and take away their privilege rights, we appreciate them for cooperating to bring the PIB at this very important time. Nobody wants their power ceded so I salute their courage.
“Another milestone is that the GMD brought their national budget for the first time, that has never happened before. Even last year we ran a battle trying to get the budget of NNPC but it was impossible. So we applaud of ourselves,”.
In his intervention, Ossai demanded details of all the expenditures incurred by NNPC, saying: “Most of your details are not projected at all. On expenditure of pipeline you never gave us any details, a budget of N57.90 billion, we need to know the details. Your JVC is negative. Rehabilitation of refinery, you didn’t give status of the refinery as of now.”
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
