You are currently viewing Nigeria realised N2.3 trillion from crude oil sales in 2018 — NEITI

Nigeria realised N2.3 trillion from crude oil sales in 2018 — NEITI

The liftings by NNPC indicates an increase of 5.95 percent when compared to 241 million barrels lifted in 2017.

Further analysis showed that out of 255.6 million barrels lifted by NNPC in 2018, actual sales were 255.3 million barrels valued at $18.2 billion.

Out of the 255.6 million barrels lifted on behalf of the Federation by NNPC, a total of 107.63million barrels was recorded as Domestic Crude Allocation (DCA) in 2018.

Out of this figure, 94 million barrels, or 87 percent of the DCA were utilized for Direct Sale Direct Purchase (DSDP), while the balance of 13.58 million barrels or 13 percent was delivered to the refineries.

Ordinarily, 160.2 million barrels (or 445, 000 barrels per day) should have been allocated for domestic consumption, but only 107.63 million barrels or 67 percent of the customary allocation for domestic consumption was allocated in 2018.

The report also showed that about N28.3 billion recorded for crude and product losses and N138.95billion for pipeline repairs and maintenance cost.

Further details from the report revealed that in 2018 “total crude oil losses due to theft and sabotage was 53.28million barrels, an increase of 46.15 percent when compared to 16.824million barrels recorded in 2017.

Similarly, the report put total products losses in 2018, due to pipeline breakages at 204,397.07 cubic meters.

Total earnings from the oil and gas sector during the year was about $32.63 billion, a 55 percent increase from the $20.99 billion realized from the sector in 2017.

The NEITI also announced plans to release the 2019 audit report later this year.

A breakdown of the $32.63 billion earned in 2018 showed that company-level financial flows into government coffers were about $16.6 billion, while flows from sales of federation crude oil and gas accounted for $16billion.

A five-year trend analysis of the earnings from the extractive sector showed a 54.6 percent drop from $54.6 billion in 2014 to $24.8 billion in 2015.

The earnings further dropped by 31.2 percent to $17.05billion in 2016 but increased by 23 percent to $20.99 billion in 2017.

The NEITI 2018 audit reconciled payments by 71 companies, including the Nigeria Liquefied Natural Gas (NLNG) that met the materiality threshold set for the exercise.

A total of eight government entities were also covered by the audit.

The report disclosed that “out of the $32.63 billion earned from the sector in 2018, about $19.92 billion was transferred [directly] into the Federation Account, while $5.21billion and $4.04billion were transferred into the JV Cash Call Account and NNPC designated accounts respectively.”

The NNPC designated accounts are the Naira and dollar accounts where domestic crude sales and the federation equity, royalty, petroleum profit tax, and in-kind oil sales are paid into respectively before remittance to the Federation Account.

The report further disclosed that “$2.10billion was transferred into third parties project financing accounts and $1.37billion were recorded as subnational transfers.

On production, the total crude oil production in the country within the period under review was put at 701 million barrels, representing a slight increase of 1.5 percent when compared to 690 million barrels produced in 2017.

Details showed that Joint Ventures (JVs) contributed to the highest production of 315 million barrels, followed by Production Sharing Contracts (PSCs) which recorded 270.610 million barrels.

Other funding arrangements like Sole Risk (SR), Marginal Fields (MFs) and Service Contracts (SCs) accounted for 92.2 million barrels, 22 million barrels, and 1.3 million barrels respectively.

“JV companies’ production increased by 3.12 percent in 2018 compared to 2017, while PSC operators’ production decreased by 10.90 percent.

Similarly, SR operators’ production increased by 58.72 percent in 2018 compared to 2017.

Production from the SC decreased by 10.27 percent, while production from MF operators increased marginally by 1.18 percent,” the report stated.

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