Nigeria oil & gas records 5% revenue loss between 2013 – 2014 – NEITI

Poor metering, inefficient management bane of oil, gas sector – NEITI
United Bank for Africa

Nigeria’s oil and gas sector saw a revenue fall of 5 percent between 2013 and 2014, the Nigeria Extractive Industries Transparency Initiative (NEITI) latest report has revealed.

The total revenue flow for the sector fell from $58.07 to $55.5 billion between 2013 and 2014, a decline of about 5%. However, the solid minerals sector in 2014 saw a boost, as it showed a marked improvement over the previous year(2013), with a 48% rise from the N37.676 billion of 2013 to N55.8 billion in 2014.

The report also said that Nigeria earned $55.5 billion from the oil and gas sector and N55.82 billion from the solid minerals sector in 2014.

A total of $4.7 billion and N318.2 billion that should have been remitted into the Federation Account were not remitted by the Nigerian Petroleum Development Company, NPDC, and its umbrella company, NNPC.

At the close of the 2014 audits, NPDC had not paid the outstanding $1.7 billion for the eight OMLs under the Shell JV divested to it by NNPC. NPDC had also not paid for the four OMLs under the NAOC JV divested to it by NNPC. Those four assets were recently valued by DPR at $2.25 billion; NPDC had sought clarification for the basis of the valuation.

Losses from the crude-for-product swap and Offshore Processing Arrangements (OPA) were put at $198.7 million in 2014.

The report also said forty-one (41) oil and gas companies and 16 government agencies were audited for the 2014 Oil and Gas Audit year. These companies made material payments of $5 million and above to the federation in 2014 and the government agencies that received funds on behalf of the federation.

109 producing assets were active in the year, comprising:  59 Joint Venture (JV) licenses; 26 Sole Risk and Marginal Field Operating (SRMF) licenses; 23 Production Sharing Contract (PSC) licenses; and one Service Contract (SC) license.

The 2014 oil and gas audit also revealed the following: 22 billion litres of petroleum products were imported as against the 20 billion litres imported in 2013, with 950 million litres of the products locally produced in 2014 as against the 2.6 billion litres locally produced in 2013; N1.2 trillion was processed as subsidy claims in 2014 as against the N1.3 trillion processed for subsidy in 2013; and N426.6 billion was distributed in 2014 under the Subsidy Re-investment Programme (SURE-P), same as the SURE-P figure for 2013.