NNPC spends N1.03tr on refineries rehab, pipelines repairs, oil search, others


Ike Amos & OpeOluwani Akintayo 

Abuja/Lagos – The Nigerian National Petroleum Corporation, NNPC, says it has spent N987 billion so far on the rehabilitation of its four refineries in Warri, Kaduna and Port Harcourt as well as on repairs of pipelines and the search for oil, among others.

The NNPC put money spent on pipelines repairs within the space of five years, including money lost as a result of product loss, at N966 billion.

According to the corporation, N71.17 billion was spent from January 2020 to January 2021 and N21.47 billion spent in January 2021 alone on the rehabilitation of the country’s moribund refineries, the Nigeria-Morocco gas pipeline, and oil search in the frontier basins.

The National Petroleum Investment Management Service, NAPIMS – the investment management arm of the NNPC – disclosed these in a report on its spendings, during its February 2020 presentation to the Federation Account Allocation Committee, FAAC.

NAPIMS listed the other government priority projects it funded to include the National Domestic Gas Development; Gas Infrastructure Development; Renewable Energy Development, RED; Crude Oil Pre-Export Inspection Agency Expenses and pre-export financing.

It disclosed that in January 2021, rehabilitation of the refineries gulped N8.33 billion; pre-export financing received N5 billion; National Domestic Gas Development N3.17 billion; and Gas Infrastructure Development N2.39 billion.

In addition, Frontier Exploration Services, which also involves the search for hydrocarbons in inland basins, especially in the northern part of the country, received N1.96 billion funding; Crude Oil Pre-Export Inspection Agency Expenses and pre-export financing, NESS-FESS, received N402.69 million; Renewable Energy Development’s financing gulped N119.83 million; while N83.33 million financing was provided by NAPIMS for the Nigeria-Morocco pipeline.

In December 2020, NAPIMS had spent a total of N20.23 billion on these projects, with N8.33 billion spent on the rehabilitation of the country’s refineries; N4.19 billion and N3.17 billion spent on National Domestic Gas Development; Gas Infrastructure Development respectively; while N2.47 billion and N2.08 billion were spent on pre-export financing and Frontier Exploration Services respectively.

 363 vandalism cases in 10 months

NAPIMS’ parent company, the NNPC had revealed in an earlier report that it spent a sum of N49.7 billion on pipeline repairs in 10 months – January to October 2020.

NNPC said it recorded a total of 363 vandalised points in its pipeline systems during the period, necessitating the expenditure.

A breakdown showed that the sum of N5.48 billion was spent on repairs and management in January; N6.74 billion in February; N7.69 billion in March; N7.84 billion in April; N7.99 billion in May and N6.24 billion in June.

Although it spent N1.80 billion in July; N1.49 billion in August; and N4.41 billion in October, no repairs and management cost was incurred in September.

It said 23 pipeline points were vandalised in October, representing about 10 per cent increase from the 21 points recorded in September.

“Products theft and vandalism have continued to destroy value and put NNPC at disadvantaged competitive position,” the NNPC said.

It stated that of the October figure, “Mosimi Area accounted for 83 per cent of the vandalised points while Port Harcourt Area accounted for the remaining 17 per cent.

The corporation’s pipelines have over the years suffered spates of vandalism which alongside lack of maintenance, and poor management have left the assets under-performing.

As a result, many of the depots and pipelines have remained idle for years.

N966bn expenses on pipeline repairs in 5 years

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In a related development, the NNPC put money spent on pipeline repairs within the space of five years, including money lost as a result of product loss, at N966 billion.

The explanation came in response to the query raised in the 2016 report of the Auditor General of the Federation, AuGF, currently being scrutinised by the Senate Public Account Committee, led by its chairman, Senator Mathew Urhoghide.

According to the corporation, the N966 billion expenses and losses were calculated to be between 2010 and 2015.

*Technicians carrying out repair work on a vandalised pipeline.

The Senate panel had insisted on probing the NNPC on an alleged failure to remit N4 trillion into the federation account as contained in the AuGF report.

“It was observed from the examination of NNPC report to Technical Sub- Committee of the Federation Account Allocation Committee meeting held in December 2016 that a cumulative total of N4.08 trillion remained unremitted to the Federation Account by the NNPC as at 31st December 2016.

“The total revenue unremitted as at 1st January 2016 from amounts payable into the Federation Account by NNPC was ₦3.88 trillion.

“The sum of N1.198,138,355,860.30 was due in revenue to the Federation Account out of the total generated in 2016. However, the NNPC paid the sum of N1,000,545,058,966.20 resulting in an amount withheld of N197,593,296,894.02.

“This brought the total amount withheld by the NNPC from the Federation Account as of 31 December 2016 to N4,076,548,336,749.75,” part of the AuGF report read.

However, the NNPC, in a written response, said “the unremitted N4 trillion was arrived at without taking cognisance of the subsidy and pipeline repairs and management associated with domestic crude oil transaction”.

The NNPC said: “Subsidy approved and certified by Petroleum Products Pricing Regulatory Agency from 2010 to 2015 stood at N4 trillion. Also in 2016, PMS under recovery stood at the N28.6 billion which brings the total subsidy/PMS under recovery to N4 trillion.”

The corporation added: “Aside the above, pipeline repairs and products losses so incurred stood at N966 billion for the same period.”

 Cash call payments to JV partners up 0.42% – NNPC

Also during the February 2020 presentation to the Federation Account Allocation Committee, FAAC, NNPC told the committee that it has increased its total cash call arrears repayment to its Joint Venture, JV, partners by 0.42 per cent to N3.094 billion as at November 2020, compared to N3.081 billion as at October 2020.

In the presentation to member of the FAAC, the NNPC did not provide reports of payment for December 2020 and January 2021.

Specifically, the NNPC stated that total repayments to Shell Petroleum Development Company, SPDC; Mobil Producing Nigeria, MPN; Chevron Nigeria Limited, CNL; Total Exploration and Production Nigeria, TEPNG; and Nigerian Agip Oil Company, NAOC; stood at $455.3 million, $833,75 million, $1.04 billion, $358.85 million and $403.73 million respectively.

This, according to the NNPC, left an outstanding balance of $917.21 million, $55.48 million, $252.12 million and $370.93 million for SPDC, CNL, TEPNG, and NAOC respectively. This brings the total outstanding indebtedness to $1.59 billion.

The NNPC noted that it had concluded the payment to MPN for the arrears, adding that repayments to SPDC were from the price balance distribution on Project Santolina, while payments to CNL were from price balance distribution on Projects Cheetah and Falcon.

 

 

 

 

 

 

 

 



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