Nigeria earned $21 billion from the oil and gas sector in 2017, representing a 23 per cent increase from the 2016 figures of $17.05 billion and 15 per cent lower than 24.79 billion inflows recorded in 2015, the Nigeria Extractive Industries Transparency Initiative (NEITI) has said.
A breakdown of the financial flows by revenue streams showed that crude oil and gas sales topped the table with about $10.19 billion, while other financial flows accounted for about $10.13 billion.
Revenue from other entities like the Niger Delta Development Commission (NDDC), Nigeria Content Development Monitoring Board (NCDMB) etc were $669.05 million.
NEITI in its 2017 oil and gas industry report released on Wesnesday in Abuja, revealed that “There was a steady decline in year-on-year revenues from 2013 to 2016, with the sharpest drop of 55% in 2015 compared to the preceding year. The year under review experienced a 23% increase in revenues 23% from $17.055 billion in 2016 to $20.988 billion in 2017”.
NEITI noted that 2017 witnessed a halt in the steady revenue decline the sector has experienced since 2013.
The report also showed that inflows from the Nigeria Liquefied Natural Gas as dividend, interest and loan repayment were $834million. This indicates a significant increase of 114% from the 2016 figures of $390million.
In relation to oil production during the period under review a marginal increase of 4.75% (690,465 mbbls) as against the 659,137mbbls produced in 2016 was recorded.
The significant increase in revenues when compared to the increase in production volumes was as a result of the increase in oil prices. The report further pointed out that average crude oil price was higher in 2017. It was sold for an average of $54.44 as against the $43.73 in 2016, and this signifies an increase of 24.5%.
According to the NEITI report, out of the 690,465mbbls of crude oil produced in 2017, a total of 688,291mmbls was lifted. Though marginal, this represented an increase from the 668,147mmbls lifted in 2016.
The report also showed that NNPC lifted a total of 241 million barrels (mbbls) of crude oil on behalf of the federation. A breakdown of the liftings shows that federation exports accounted for 135million barrels while the domestic crude liftings accounted for 106million barrels. The report further disclosed that the federation exports volume went down by 36% from 211mbbls in 2016 to 135mbbls in 2017. While liftings by the companies amounted to 447mbbls, joint venture operations, production sharing contracts and sole risk operators accounted for 130mbbls, 223mbbls and 79million barrels respectively. Moreso, marginal field and service contract operators lifted 15mbbls and 1mbbls during the year under review
On crude allocation for domestic use, the report indicated that “In 2017, the NNPC allocated 105.925Mbbls for domestic use. While 25% of this quantity was supplied to the refineries, 69% was on the other hand utilised for the Direct Sales and Direct Purchase arrangement.
One of the key findings of the 2017 oil and gas report was that despite the improved performance of the oil and gas sector in 2017 when compared to 2016, the projected production volumes were not realized. “The reduction in projected production figures due to unscheduled maintenance and repair of equipment posed a challenge to production in the year under review”, the report stated. Other reasons for the reduction were deferred production due to turn around maintenance, vandalism and pipeline integrity issues.
On production arrangements in terms of volumes, joint venture (JVs) and production sharing contracts produced 305mbbls and 303mbbls. Others such as service contracts, marginal fields and sole risks accounted for the balance.
According to the report, “Sole Risk operations produced the highest percentage increase of 114%, and Marginal Field operations witnessed an increase of 32% in the year under review. Overall production from the JV companies increased by 16.199mbbls, indicating a 6% increase from 2016 volumes. On the contrary, PSC and SC operations suffered volume reductions of 6% and 31% respectively”.
NEITI further reported that “In 2017, the total gas production was 3,494,774mmscf from all arrangements, slightly higher than 2016 production of 3,051,249mmscf by 15%. The total volume of gas flared in 2017 increased by 23% and gas utilization saw a significant jump of 32% when compared to 2016 volumes”.
The report also stated $8.474 billion was budgeted for Cash Call obligations, but only 49% or $4.13billion was paid as at January 2018. Similarly, out of the $5.125billion dollars negotiated as outstanding cash call liabilities for 2016, $2.177 billion was paid, therefore, leaving a balance of $2.948 billion.
