The Nigerian National Petroleum Corporation (NNPC) earned revenue of N4.61tn and spent N4.52tn in 2020, according to a report released on Friday.
The report, titled ‘2020 NNPC Annual Performance Review’, was developed by BudgIT in partnership with Oxfam.
According to the organizations, NNPC’s revenue in 2020 showed a 23.8 percent decrease from the N6.05tn it earned in 2019.
The report said, “The expenditure of all its subsidiaries stood at N4.52tn. Total crude oil production suffered an 11.61 percent decrease, from the 734.27 million barrels produced in 2019 to the 649.00 million barrels produced in 2020.
“Pipeline breaks, a key cause of oil revenue leakage and production loss, had a 70.28 percent decline from 1,484 breakpoints in 2019 to 441 breakpoints in 2020. Likewise, a corresponding 57.87 percent decline in NNPC’s spending on pipeline maintenance costs was recorded as it plummeted from N126.66bn in 2019 to N53.36bn in 2020.”
According to the report, NNPC’s ailing refineries, led by Kaduna Refining and Petrochemical Company, wiped out a total of N100.03bn from the corporation’s revenue in 2020, despite past announcements of investments in turnaround maintenance.
“Also, despite announcing a deal to boost PHRC’s performance through a colocation agreement with Maire Tecnimont SPA a few years ago, the Federal Executive Council recently approved another $1.5bn for a rehabilitation exercise of the PHRC,” it said.
The report noted that the global oil and gas industry faced the twin shocks of the oil price crash and the COVID-19 pandemic last year, influencing demand and supply of crude oil and plunging Nigeria into its second recession in six years.
It said the amount the NNPC claimed as crude oil losses rose by 35.33 percent from N3.46bn in 2019 to N5.35bn in 2020, while NNPC’s product losses declined from N32.96bn in 2019 to N15.71bn in 2020.
According to the report, NNPC has struggled to keep its refineries operating profitably.
It said in 2020, the refineries were out of operation, adding that the last time the refineries were in operation was July 2019.
They added that in the 2020 financial year, the refineries in Kaduna, Port Harcourt, and Warri incurred a cumulative loss of N100.39bn and accumulated a total deficit of N486.54bn between 2016 and 2020.
The report said there was a decrease of 7.99 percent in the total volume of petrol imported into the country via the Direct Sales Direct Purchase arrangements in 2020, compared to the volume imported in 2019.
It said, “NNPC continues to record shocking losses, with its Corporate Headquarters responsible for its biggest loss worth N123.96bn in 2020. Six other subsidiaries made a cumulative loss of N125.12bn.
“The Nigerian Petroleum Development Company emerged as a shining star in the 2020 financial year with an N148.80bn profit, followed by the Nigerian Gas Company Limited with N80.37bn and the Nigerian Gas Marketing Company with N38.01bn profit.”
They added, “In 2020, $1.50bn, representing 57.25 percent of the total $2.62bn receipts from crude oil and gas exports, was transferred to Joint Venture Cash call, while the balance of $1.12bn representing 42.75 percent was remitted to FAAC. From the proceeds from the sale of domestic crude oil, N826.03bn was allocated to JV Cost recovery while N713.12bn was transferred to the Federation Account.”
According to the report, in 2020, the NNPC made a total payment of N1.05tn to the Federation account.
“These include N713.12bn for naira payments from domestic crude and $1.12bn (N342.45bn) USD payments. year on year. This N1.05tn represents a 3.67 percent decrease from the total N1.09tn remitted to the federation account in 2019 from both equity export and domestic export,” it added.
President Muhammadu Buhari had recently announced a net profit reported by the NNPC for the first time in its 44-year history.
He had said the corporation made N287bn profit after tax in 2020.