$53m | Business Post Nigeria

By Ebitonye Akpodigha The Direct Sale, Direct Purchase (DSDP) initiative introduced by the Nigerian National Petroleum Corporation (NNPC) is already yielding fruits, the Corporation has disclosed. In its latest report, the NNPC revealed that since it introduced the concept in April 2016, it has recorded an average monthly savings of $53 million. This, the report said, is despite the renewed activities of Niger Delta militants in oil producing regions, which have reduced crude oil and gas production in Nigeria as well as a sharp slump in the prices of oil. It would be recalled that the DSDP was initiated to ensure full recovery of crude oil sales value and delivery of 100 per cent federation revenue from domestic crude allocation which is 445,000 barrels per day in place of the previous offshore processing and crude swap arrangements which resulted in huge losses. NNPC noted that between February and July 2016, it saved about $336,379,854.98 from the DSDP scheme. According to the report, the Kaduna, Warri and Port Harcourt refineries had a surplus posting of N0.78 billion in July. “The combined value of output by the three refineries (at import parity price) for the month of July 2016 amounted to N20.09 billion while the associated crude plus freight cost was N19.31 billion, giving a surplus of N0.78 billion after considering overhead of N7.38 billion. “Despite these challenges (irregular crude supply and impact of pipeline vandalism) the domestic refineries have a consolidated positive cash flow for the month under review due to favourable products price variance and ongoing restoration of the refineries,” the report said. “For the month of July 2016, the three refineries produced 139,2841MT of finished petroleum products out of 126,756MT of crude processed and intermediate of 40,640MT at a combined capacity utilisation of 6.74 per cent compared to 12.40 per cent combined capacity utilisation achieved in the month of June 2016,” it added. NNPC, however, disclosed that militancy in the Niger Delta caused a loss worth N24.18 billion. “The degree of turbulence in the nation’s oil and gas sector due to renewed militancy has grossly impacted on oil and gas production with its attendant consequences for the economy. In July 2016, operations, about 311 vandalised points were recorded. “This 12th publication of NNPC monthly financial and operations report indicates a trading deficit of N24.18 billion in July 2016 as against N26.51 billion deficit reported in June, 2016, the net cash flow improved by 8.77 per cent or N2.32 billion in July 2016,” which it explained “was largely due to increase in revenue stream from NPDC and PPMC, despite the upsurge in upstream and downstream vandalised points.”

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