A report recently released by the Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that only 25percent of crude allocation for domestic use was supplied to the nations three refineries in 2017.
According to the report, the Nigeria National Petroleum Corporation (NNPC), allocated 105.925Mbbls for domestic use, but of the quantity only 25percent was supplied to the refineries while 69percent was utilised for the Direct Sales and Direct Purchase (DSDP) arrangement.
The report also disclosed that Nigeria earned $21 billion from the oil and gas sector in 2017, indicating a 23percent increase from the 2016 figures of $17.05 billion and 15percent lower than 24.79 billion inflows recorded in 2015.
A breakdown of the financial flows by revenue streams showed that crude oil and gas sales topped the table with about $10.19billion, while other financial flows accounted for about $10.13billion. Flows to other entities like the Niger Delta Development Commission (NDDC), Nigeria Content Development Monitoring Board (NCDMB) etc were $669.05million.
The information and data is contained in the 2017 oil and gas industry report Recently released today by NEITI in Abuja.
In a five – year comparison of revenue flows from the oil and gas sector, the report revealed that there was a steady decline in year-on-year revenues from 2013 to 2016, with the sharpest drop of 55% in 2015 compared to the preceding year. The year under review experienced a 23% increase in revenues 23% from $17.055billion in 2016 to $20.988billion in 2017.
“In effect, 2017 witnessed a halt in the steady revenue decline the sector has experienced since 2013,” the report noted.
The report also showed that inflows from the Nigeria Liquefied Natural Gas as dividend, interest and loan repayment were $834million, indicating a significant increase of 114% from the 2016 figures of $390million.
In relation to oil production during the period under review a marginal increase of 4.75% (690,465 mbbls) as against the 659,137mbbls produced in 2016 was recorded.
The significant increase in revenues when compared to the increase in production volumes was as a result of the increase in oil prices. The report further pointed out that average crude oil price was higher in 2017. It was sold for an average of $54.44 as against the $43.73 in 2016, and this signifies an increase of 24.5%.
One of the key findings of the 2017 oil and gas report was that despite the improved performance of the oil and gas sector in 2017 when compared to 2016, the projected production volumes were not realized.
“The reduction in projected production figures due to unscheduled maintenance and repair of equipment posed a challenge to production in the year under review”, the report stated. Other reasons for the reduction were deferred production due to turnaround maintenance, vandalism and pipeline integrity issues.
NEITI further reported that “In 2017, the total gas production was 3,494,774mmscf from all arrangements, slightly higher than 2016 production of 3,051,249mmscf by 15%. The total volume of gas flared in 2017 increased by 23% and gas utilization saw a significant jump of 32% when compared to 2016 volumes”.
The report also stated $8.474 billion was budgeted for Cash Call obligations, but only 49% or $4.13billion was paid as at January 2018. Similarly, out of the $5.125billion dollars negotiated as outstanding cash call liabilities for 2016, $2.177 billion was paid, therefore, leaving a balance of $2.948billion.