Nigeria earned a total of $32.63 billion from the oil and gas sector in 2018, a 55percent increase on the $20.99 billion recorded from the sector in 2017.
Out of the $32.63 billion earned from the sector in 2018, the sum of $19.92 billion was transferred directly into the Federation Account, a report recently released by the Nigeria Extractive Industries Transparency Initiative (NEITI) disclosed.
The report noted that $5.21billion and $4.04billion were further transferred into the JV Cash Call Account and Nigerian National Petroleum Corporation (NNPC) designated accounts respectively.
The NNPC designated accounts are the Naira and dollar accounts where domestic crude sales and the federation equity, royalty, petroleum profit tax and in-kind oil sales are paid into respectively before remittance to the Federation Account.
The report further disclosed that $2.10billion was transferred into third parties project financing accounts and $1.37billion recorded as subnational transfers.
A breakdown of the $32.63 billion earned in 2018 showed that company-level financial flows into government coffers were $16.6 billion, while flows from sales of federation crude oil and gas accounted for $16.billion.
A five-year trend analysis of the earnings from the extractive sector showed a 54.6% drop from $54.6 billion in 2014 to $24.8 billion in 2015. The earnings further dropped by 31.2% to $17.05billion in 2016, but increased by 23% to $20.99 billion in 2017 and by 55% to $32.63 billion in 2018. Though the last two years bucked the trend of persisted decrease since 2014, the revenues from the sector in 2018 were still a staggering 40% below the $54.6 billion earned in 2014 when oil prices commenced a precipitous fall.
The NEITI 2018 audit reconciled payments by seventy-one companies and the Nigeria Liquefied Natural Gas (NLNG) that met the materiality threshold set for the exercise. A total of eight government entities were also covered by the audit.
On production, the total crude oil production in the country within the period under review was put at 701 million barrels, representing a slight increase of 1.5% when compared to 690 million barrels produced in 2017.
A breakdown showed that Joint Ventures (JVs) contributed highest production of 315 million barrels, followed by Production Sharing Contracts (PSCs) which recorded 270.610 million barrels. Other funding arrangements like Sole Risk (SR), Marginal Fields (MFs) and Service Contracts (SCs) accounted for 92.2 million barrels, 22 million barrels, and 1.3 million barrels respectively.
“JV companies’ production increased by 3.12% in 2018 compared to 2017, while PSC operators’ production decreased by 10.90%. Similarly, SR operators’ production increased by 58.72% in 2018 compared to 2017. Production from the SC decreased by 10.27% while production from MF operators increased marginally by 1.18%,” the report stated.