The minister of petroleum, President Muhammadu Buhari, has turned about the fortunes of the state run oil company, NNPC.
A copy of NNPC’s monthly financial and operations management report showed that NNPC made a profit of N273.74 million in May 2016.
This was against a loss of N19.43 billion in April.
The profit is being attributed to financial prudence of former GMD of NNPc, Dr. Ibe Kachikwu.
The monthly report stated that “PPMC recorded a net gain of N17.69 billion as against the net loss of N6.91 billion in April 2016.
“This happened following complete stoppage of commercially unfavorable swaps and offshore processing agreements (OPAs).
“Direct-Sale and Direct-Purchase has now replaced the previous regime.
“Notwithstanding these improvements, renewed and vigorous vandalism of pipelines in Niger Delta means that productions were shut-in and cargoes deferred.
“This reduced revenues streams accruing to NPDC and the federation.”
The report further stated that deficit “was inverted in the month of May 2016 due to significant increase in revenue generation which could be attributed to the rise in petroleum product sales by 51.13%”.
Comparing NPDC’s performance to national production, the company’s production share amounted to 4.31%.
NPDC production is expected to hit production levels of 250,000bp/d after the completion of the on-going NPDC re-kitting project and repairs of vandalized facilities.
“Also on the NPDC operated JV assets, in which NPDC owns 55% controlling interest, crude oil production amounted to 13,296,309 (or 40.26% of the NPDC total production).
“On the JV assets not operated by NPDC, production level stood at 9,516,447 barrels or 28.81% of the company’s production,” the report stated.
“The adverse performance was due to crude pipeline vandalism in the Niger Delta region coupled with on-going refineries revamp; however the three refineries continue to operate at minimal capacity,” the report stated.
In spite of the gradual recovery of crude oil production, two other Nigerian crude grades – Forcados and Brass River – remain shut-in.
Notwithstanding output shortages, the country’s crude exports have been on track to rise to 2.2 million barrels per day.
Currently, the nation produces 1.9 million barrels per day.
Nigerians are looking up to the new GMD of NNPC, Baru, to see whether he’d take NNPC’s fortunes to the next level.