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NNPC Report: FG Refineries Earn N21bn, Lose N778bn In Five Years

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The government-owned refineries, being run by the Nigerian National Petroleum Corporation, reported a total loss of N778.71bn from 2015 to 2019, an analysis of data collated from their financial statements has shown.

The refineries generated total revenue of N21.12bn in the five-year period as they operated at below their full capacities.

The refineries, which are located in Port Harcourt, Kaduna, and Warri, have a combined installed capacity of 445,000 barrels per day.

The country relies largely on the importation of refined petroleum products as its refineries have remained in a state of disrepair for many years despite several reported repairs.

Port Harcourt Refining Company generated total revenue of N10.33bn from 2015 to 2019 but posted a loss of N229.14bn.

The refinery generated zero revenue in 2019; N1.46bn in 2018; N4.82bn in 2017; N3.37bn in 2016, and N683.52m in 2015.

It lost N50.53bn in 2019; N45.59bn in 2018; N53.77bn in 2017; N43.44bn in 2016, and N35.81bn in 2015.

Kaduna Refining and Petrochemical Company reported revenue of N4.17bn and a loss of N307.27bn in the five-year period.

The refinery generated revenue of N37.17m in 2019, compared to zero revenue reported in 2018. Its revenue had risen to N2.24bn in 2017 from N1.47bn in 2016 and N418.76m in 2015.

It posted a loss of N65.99bn in 2019, N63.64bn in 2018, N111.89bn in 2017, N30.19bn in 2016, and N35.56bn in 2015.

Warri Refining and Petrochemical Company posted revenue of N6.62bn and a loss of N242.30bn in the period under review.

Its revenue dropped to N921.82m in 2019 from N1.99bn in 2018 and N1.25bn in 2019. It had risen from N884.39m in 2015 to N1.58bn in 2016.

The refinery recorded a loss of N51.66bn in 2019, compared to N52.18bn in 2018, N84.60bn in 2017, N24.50bn in 2016, and N29.36bn in 2015.

Kaduna refinery, in its 2019 annual report, said its losses had arisen principally from its inability to operate profitably under its current processing contract with its parent company, NNPC.

The report said, “KRPC’s primary source of revenue is from the processing of crude oil for NNPC. The processing fees are determined solely by NNPC, without consideration for related costs, and are significantly lower than the costs incurred to produce.

“The high cost is also due to the current structure of the organization whereby the company bears the total cost of personnel expenses.”

It said the NNPC had undertaken not to reduce its shareholding in the company and to continue to support it by funding its operations ‘until such time the company is in a position to adequately finance its operations.

NNPC’s latest monthly report showed that the Port Harcourt refinery stopped processing crude oil in April 2019, while Warri and Kaduna refineries have been idle since May and June 2019 respectively.

The corporation said the declining operational performance of the refineries ‘is attributable to the ongoing revamping of the refineries, which is expected to further enhance capacity utilization once completed’.

The Federal Executive Council approved on Wednesday the plan by the Ministry of Petroleum Resources to rehabilitate the Port Harcourt Refinery with $1.5bn.

BIG STORY

BREAKING: Ex-Minister Aisha Al-Hassan ‘Mama Taraba’ Is Dead

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Aisha Jummai Al-Hassan, popularly known as Mama Taraba is dead.

She died at 61.

Alhassan reportedly died from an unknown illness.

She was a member of the All Progressives Congress (APC) before defecting to the United Democratic Party (UDP) in September 2018.

She decamped after resigning from the Buhari administration.

Details Later…

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Oil License: Reps Issue 14 Days Ultimatum To NNPC, Threatens To Summon Buhari

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The House of Representatives Committee on Petroleum (Upstream) has given the Nigerian National Petroleum Corporation (NNPC) 14 days ultimatum to appear before it. Should the NNPC fail to appear, the committee said, it will summon the Minister of Petroleum, President Muhammadu Buhari.

According to Premium Times, The committee is investigating the revocation and reversal order on the operating licenses of OML 123, 124, 126, and 137.

The oil assets have been the subject of dispute between Chinese-owned oil companies and the federal government. The dispute led to the revocation and restoration of the mining licenses by the Buhari administration.

On Thursday, NNPC, Addax Petroleum Exploration Nigeria Ltd, Kaztech Engineering Ltd, and Salvic Petroleum Resources Ltd all failed to appear before the committee. However, the Minister of Petroleum (State), Timipriye Sylva, and the Director of Department of Petroleum Resources (DPR), Sarki Auwalu, appeared before the committee.

Myrki Adar (APC, Sokoto), the chairman of the committee, issued the ultimatum and expressed readiness to summon the president if the Group Managing Director of the NNPC, Mele Kyari, should fail to appear before the panel.

He disclosed that the NNPC sent a letter to the committee that the matter was at the Supreme Court. However, Mr Sylva disputed the claim that the matter was in court.

While issuing the ultimatum, Mr Adar said the panel will not hesitate to summon the president, since he is the petroleum minister.

“Our message to all those that fail to appear before us as invited namely the NNPC, Addax petroleum company limited, Kaztech engineering ltd and Salvic petroleum resources limited.

“We are giving them two weeks from today. We would reschedule this meeting from now to two weeks to appear before this committee and continue our business.

“Unless they want us to invite President Muhammadu Buhari as minister of petroleum. If they do not come, we will not hesitate. Buhari is a minister. He appointed himself, approved by the parliament and he is doing his job. We would invite him. And I know as a law-abiding president he would come. If he comes, Nigerians should know that it is the failure of the NNPC to come that led him to appear before us.”

Background

On April 6, the DPR revoked four oil assets belonging to Addax, now owned by Sinopec, a Chinese state oil company.

A presidential panel headed by a former senator, Magnus Abe, had accused the oil company of “economic wastages.”

The DPR revoked the four Oil Mining Leases (OMLs) citing the inability of the firm to comply with agreed terms.

The assets were re-awarded to two indigenous companies; Kaztec Engineering Limited/Salvic Petroleum Resources Limited (KEL/Salvic) Consortium.

Less than two weeks later, the federal government in a statement by the spokesperson to the President, Garba Shehu, restored the mining right of OMLs 123, 124, 126, and 137 to the NNPC which has a Production Sharing Contract with Addax Petroleum; thus reversing its operations back to Addax.

Aborted motion
Last week, a motion to investigate the matter was listed on the Order Paper of the House.

The motion was in the name of Nicholas Ossai (PDP, Delta). However, the Speaker, Femi Gbajabiamila, asked the motion to be stepped down.

The motion was stepped down and not considered by the House.

Minister Speaks

On Thursday, Mr Sylva said the NNPC wrote a counter-memo against his memo on the Addax assets. He added that he is yet to recognize the restoration order issued by NNPC.

“I wrote a memo to Mr President and it was approved, and NNPC wrote another memo against my memo.

“Having said that, the issue at hand is that no law was breached at all as far as Addax affairs are concerned. I am also not aware of any matter at the Supreme Court on this particular matter. I have just consulted the director of the Department of Petroleum Resources (DPR) who also told me that he is not aware.

“The matter of Addax was not commenced by me, this asset has been sub-optimally managed from the beginning of the acquisition to this moment, it has not been optimally operated.

“When Sinopec group acquired this asset from Addax, production was 130,000 barrel per day, as at today, we struggle to produce 35,000 barrel per day, from this asset, because there are no new investments, and the asset has progressively declined. We believe that with the requisite investment, we would have probably taken the asset to beyond 130,000 barrels per day.

“Obviously, there was an issue of mismanagement of the asset. Now, in the wisdom of the attorney general of the federation, he wrote to the president to say that this asset has not been properly managed. The letter was forwarded to me by Mr President for me to review,” he said.

He added that “NNPC is not in a position to withdraw a revocation or advise the withdrawal or revocation.”

President Buhari is the substantive minister for petroleum and has been since 2015. However, back in December 2020, the Minister of Justice, Abubakar Malami, had said that the National Assembly cannot summon the President.

 

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Probe Begins Monday As FG Suspends NPA Managing Director, Bala-Usman

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The President, Major General Muhammadu Buhari (retd.), has suspended the Managing Director of the Nigerian Ports Authority, Hadiza Bala-Usman, sources familiar with the development said on Thursday.

It was learnt that a panel of inquiry had been constituted to look into the matter that prompted her suspension, as well as other concerns. The panel begins its work on Monday.

It was, however, not clear what necessitated the suspension of the NPA boss, who was only reappointed in January this year by Buhari.

Senior staff members of the Federal Ministry of Transportation, the parent ministry of the authority, confirmed the development but insisted that there was no official statement on the matter yet.

The spokesperson of the ministry, Eric Ojiekwe, could not be reached for comments on the development, as he did not answer calls when contacted on Thursday night.

Bala-Usman was first appointed as the managing director of the NPA in 2016 and was reappointed in January this year for another five years.

On Wednesday, the suspended NPA boss led her organization to sign a Memorandum of Understanding with the National Bureau of Statistics and the Nigerian Ports Authority to commence the production of statistical information and data analytics on port-related activities..

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