Nigeria raked in $14.5bn from crude oil sales in 2017 – NEITI

The total revenue from sale of federation share of oil and gas for 2017 was $14.5 billion, the Nigeria Extractive Industries Transparency Initiative (NEITI) has said. 

According to NEITI, $13.18 billion or 90.8 per cen’t was from crude oil and $1.32 billion or 9.1 per cent from gas.

NEITI in its “commodity trading for 2017” report released on Wednesday, noted that of that amount, NNPC deducted N297 billion from earnings from the Domestic Crude Allocation as costs and losses. A breakdown showed that N141.6 billion went to under-recovery on petroleum products; N25 billion for crude and product losses; N130.4 billion for pipeline repairs and maintenance. 

The sum of N77.92 billion was under-remitted by NNPC to the Federation Account from Domestic Crude Allocation in the period under review.

The Corporation acknowledges the under-remittance and states that there is an ongoing reconciliation to net off the N77.92 billion from “the established Federation indebtedness to the Corporation of N797bn arising arising from KPMG Forensic audit of the Corporation at the instance of the Federation.” 

NEITI also revealed that Nigeria produced 692 million barrels of crude oil in 2017.

It noted that out of the  amount 240.9 million barrels representing 35 per cent of the total crude oil production for the year went to the federation account. 

According to the report,  the federation share for the period under review was 4 per cent higher than the 231.6 million barrels in the same category for 2016 but was 19 per cent lower than the 297.8 million barrels for 2015. 

This shows that while there was a slight improvement on the figure for 2016 (a year characterized by vandalism and sabotage of oil facilities), crude production for 2017 was about a fifth less than the 2015 level.

Commenting on the report, Executive Secretary of  NEITI, Mr. Waziri Adio states that the report is part of the decision of the global Extractive Industries Transparency Initiative (EITI) to add commodity trading transparency to its scope of coverage through stand-alone and in-depth reports.

The objective, Mr. Adio stressed, “is to ensure. adequate returns to governments, increasing competition and efficiency in commodity trading, and ensuring greater public scrutiny of the resultant revenues.

“Resource-rich countries receive shares of minerals produced in their territories as equity shares or as in-kind payments, and these minerals are usually sold directly or indirectly to commodity traders through state-owned enterprises. However, the process and details of these sales are mostly shrouded in secrecy, even when more than half of the revenues from the extractive sector come from these sales. This is why the EITI resolved to beam more search-light on commodity trading. Nigeria is one of the five EITI-implementing countries selected to pilot this enhanced focus”. 

A further breakdown of key findings in the report show that 240.9 million barrels federation share for 2017 was disaggregated with  Domestic Crude Allocation (DCA) getting 105. 9 million barrels or 44 per cent of federation share; FIRS Liftings: 57.3 million barrels or 24 per cent of federation share; Federation Export: 50. 2 million barrels or 21 per cent; Third Party Financing: 17.6 million or 7 per cent; and DPR liftings: 9.9 million barrels or 4% of federation share.

Out of the 105.9 million barrels for Domestic Crude Allocation (DCA), the crude assigned for local supply of refined products was Direct Sale Direct Purchase (DSDP): 72. 8 million barrels or 69 per cent; Refineries: 26. 5 million barrels or 25 per cent; Product Exchange: 4.7 million barrels or 4 per cent; Export (unutilized portion of DCA): 1.9 million barrels or 2 per cent. 

The report further showed that the federation crude went to 29 destinations in 2017, with the top-five being: India with 41.3 million barrels (17.12%); USA, 30.6 million (12.72%); local refineries, 26.5 million barrels (10.98%); Netherlands, 22.9 million barrels (9.5%); and Spain, 21 million barrels (8.83%). 

There were 60 individual and consortiums of buyers of federation’s crude in 2017. 

“The top five buyers were: Duke Oil Company, the trading arm of NNPC, which lifted 29.3m barrels or 12.16%; TOTSA/Total oil Trading, which lifted 18.4m barrels or 7.67%; Port Harcourt Refinery which lifted 18m barrels or 7.49%; SIR/Sahara Energy Resources which lifted 15.2m barrels or 6.32%; And LITASCO SA/MRS Oil and Gas which lifted 10.5m or 4.38%,” it added.

The study however, did not cover other revenue streams from the sector such as Petroleum Profit Tax (PPT), royalties, signature bonuses, dividends, penalties and fees, statutory payments etc. 

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