Thursday, April 28, 2016 12:28PM/ FBNQuest Research
The NNPC’s accounts for February show a group operating deficit of N24.2bn (US$123m) vs N3.6bn the previous month. Group revenue slumped to N104.8bn (US$532m) from N130.9bn, and to just N672m (US$3m) from N15.9bn for the Nigerian Petroleum Development Company (NPDC).
The corporation notes that sabotage of the Forcados export line resulted in the loss of N20bn in crude oil sales over the month by the NPDC. These accounts (like January’s) do not provide an estimate for claimable pipeline repairs, and crude and product losses due to vandalism. In December’s accounts they were estimated at N103bn and N60bn respectively.
We do not draw parallels with the budgeted figures. These are based on the 2015 budget, which assumed an average oil price of US$53/b and adopted an earlier accounting treatment for the refineries to include petroleum products sales (as well as the cost of crude processing).
Total group spending in February was N129bn (US$655m), compared with N134bn the previous month. The trend has been downwards since August.
Spending by central headquarters (CHQ) for the month was flat, at N6.4bn.
The accounts cover operating performance, and so exclude below-the-line items. Disclosure has, however, dramatically improved. Achievements to date include a new direct-sale-direct-purchase arrangement to replace the opaque offshore processing/crude swaps, and the appointment of advisors on alternative financing to replace the joint venture (jv) model.