Report: Nigeria Earned $24.791bn From Oil Proceeds In 2015

…NNPC deducts N490.535bn “first line charges,” fails to remit $16.477m, N1.597bn


A report detailing Nigeria’s oil and gas sector activities for the year 2015, released Friday by the Nigeria Extractive Industries Transparency Initiative (NEITI) has shown that the Nigerian government earned total revenues of $24.792 billion from oil and gas proceeds in 2015.
Crude sales accounted for 67.47 percent of the figure while companies financial flows accounted for 32.53 percent. The proceeds represent 55percent drop compared to the $54.55 billion inflow the country earned from the sector in 2014.
The independent audit commissioned by NEITI also revealed that in the year under review, government owned oil firm, the Nigerian National Petroleum Corporation (NNPC), which acted as a player and regulator in the sector, resulting to inefficiency in the management of the sector, deducted at source “first line charges” in the sum of N490.535 billion.
A breakdown of the charges shows NNPC claiming N60.997 billion for “crude and product oil losses”, N112.818 billion for “pipeline repairs and maintenance,” and another N316.72 billion for “subsidy deductions.” The subsidy front line charge contravenes the institutional framework of the Petroleum Support Fund (PSF). The report also disclosed that the NNPC failed to remit to the federation account the sum of $16.477 million and another N1.597 billion paid by International Oil Companies (IOCs) as pipeline transportation fee.


A further analysis of the report showed that Nigeria’s total crude production for 2015 was 776,668mbbls which was 21,874mbbls less than 2014 production figure of 798,542mbbls. It also revealed that Nigeria’s ailing refineries utilised only 5.68 percent of its domestic crude allocation while the rest was either exported or sent for offshore processing.
Total value of crude loss as a result of theft and sabotage from upstream operations in the year under review, according to the report was $1.428 billion. Another $735 million and $90 million was lost to inconsistent application of pricing methodology for export crude oil and domestic crude oil respectively.
Furthermore, the report showed that of the 54 companies covered, only 30 executed corporate social responsibility in the year under review. A total of 371 CSR’s were executed at a cost of $40 million, for projects such as roads, water, hospitals and scholarships.

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