In April the NNPC reduced its operating deficit from N5.6bn the previous month to N5.3bn (US$17m), its best performance since the token profit of N0.3bn in May 2016. Profits were generated by production (N2.0bn), refineries (N1.6bn) and retail activities (N1.6bn) before deductions for central costs and ventures. The corporation’s Financial and Operations Report for April notes a sharp fall in crude output in March to 1.60 mbpd from 1.82 mbpd the previous month due to leakages, force majeure and maintenance. Most of these obstacles have since been removed.
The combined capacity utilization of the three refinery companies in April reached 24.6%, led by Kaduna which achieved 31.3%.
Earlier this week a speech made on behalf of Vice-president Osinbajo pledged that the corporation would continue to manage the four refineries, whatever agreements were reached on equity injections and concession deals. However, it also warned the audience of labour union officials that the FGN favoured greenfield investment by the private sector and that the NNPC plants would soon become obsolete without wholesale reform.
Between April 2016 and April 2017 the NNPC’s export proceeds totaled US$2.50bn, of which US$2.29bn was transferred to the joint ventures (jvs) for cash call payments. This was well short of what was due to the jvs (more than US$8bn).
Under an agreement with the oil majors, a haircut has been applied to the corporation’s arrears, a first repayment has been made, and the ventures are to become incorporated and self-financing.
The report notes that power plants generated 2,787 megawatts in April from gas supplied by the corporation, equivalent to 77% of total generation.