A total of N442.37bn is to be remitted by six international oil companies in August 2022, being proceeds from the sale of domestic crude oil in May 2022, figures obtained from the Nigerian National Petroleum Company Limited on Monday showed.
According to the NNPC the N422.37bn was for 8.887 million barrels of oil for May 2022 domestic crude payable in August 2022, adding that the six companies were joint venture partners of the national oil company.
It outlined the companies to include: Chevron Nigeria Limited, Mobil Producing Nigeria, and Nigerian Petroleum Development Company, the flagship upstream subsidiary of NNPC.
Others include: Total Exploration and Production Nigeria, First Exploration and Production, as well as Addax Petroleum.
Figures from the oil firm showed that Chevron will pay N162.24bn for 3.49 million barrels of crude oil, while N90.06bn for 1.9 million barrels of crude is expected from Mobil this month.
NPDC and Total are to remit N41.13bn and N47.26bn for 948,296 and 948,776 barrels of crude oil respectively.
Similarly, the recently commercialised company stated that First E&P and Addax will pay N33.498bn and N48.188bn for 650,071 and 948,251 barrels of crude oil in August.
In its remarks on the funds to be remitted by the firms, the national oil company stated that it was for “May 2022 domestic crude oil payable in August 2022 by NNPC in line with the 90 days payment terms.”
NNPC makes remittances from crude oil sale to the Federation Account, which are shared by the three tiers of government monthly.
However, it has not been able to make remittances since this year due to the humongous amount it spends on the subsidy of Premium Motor Spirit, popularly called petrol.
The NNPC is the sole importer of petrol into Nigeria for several years running and has been shouldering the petrol subsidy burden on behalf of the Federal Government, a development that has stopped it from making remittances to the Federation Account.
Although the N422.37bn proceeds for May 2022 oil sale are expected in August 2022, the NNPC recently stated that it would no more make remittances to the monthly Federation Accounts Allocation Committee.
The company’s Group Chief Executive Officer, Mele Kyari, disclosed this in July at the official unveiling of the firm in Abuja as a commercial entity.
Kyari had also made it clear in July that subsidy on petrol was now the Federal Government’s burden and not the responsibility of the oil company, stressing that the company was now a private outfit and had nothing to do with FAAC anymore.
Responding to a question on what would happen to NNPC’s monthly FAAC contributions, while speaking on the side-lines of NNPC unveiling, kyari said, “We are now a private company; would MTN go to FAAC?”
When probed further to tell if there would be no more FAAC remittances from the company going forward, he said, “We will pay our taxes, royalties and deliver dividends to our shareholders.”
Asked about the arrears to FAAC that was not delivered by the firm over the years, the CEO said, “Which arrears? That’s Nigerian National Petroleum Corporation.”’
On how the oil firm would handle subsidy on petrol being a commercial entity, Kyari replied that fuel subsidy was not a burden on NNPC.
The CEO had said, “Subsidy is not NNPC’s burden. Subsidy is the decision of the state and in every jurisdiction anywhere in the world, countries see them differently. In some countries, they put petroleum tax on top of the market price of these products.”
He said, “Recent preliminary work showed that about 150 illegal tappings were used in siphoning crude oil from the TNP.”
In a bid to offset the growing costs, he said companies in the sector had been forced to turn to financial institutions.
He added, “The operating cost of oil and gas firms, both those in the downstream and upstream sub-sectors, is very high now, particularly because of issues of vandalism and security.
“You will see that because of insecurity problems, many of these companies, both onshore and offshore, employ the services of heavy security personnel to safeguard their equipment. Sometimes even their staff has to be secured.
“This additional security costs a lot of money, and this is affecting their bottom-line. On the issue of vandalism, I have observed that a lot of these firms are being harassed by their host communities, which is why they improve their CSRs and give back to these communities.”
Earlier this month, the House of Representatives had decried the growing spate of oil theft in Nigeria, warning that it might ground the economy if it remained unabated.
The Minority Caucus in the House, in a statement recently issued, said it was alarmed by the massive oil theft in Nigeria.
It was reported recently that the Federal Government awarded a pipeline surveillance contract to the former leader of the Movement for the Emancipation of Niger Delta, Government Ekpemupolo, popularly known as Tompolo, to help reduce the level of oil theft and pollution caused by bunkering activities in the region.
