Nigeria’s crude oil earnings drop by 22.2% in 2012

Revenue from Nigeria’s crude oil and gas exports fell significantly by 22.2 per cent to N1, 780.9 billion, according to the 2012 yearly report of the Central Bank of Nigeria (CBN).

Besides, it said that the combined capacity utilisation of the country’s three refineries fell by 3.6 percentage points, below the level of 34.7 per cent recorded in 2011.

Similarly, receipts from domestic crude oil sales declined by 28.2 per cent to N1, 874.2 billion, while revenue from Petroleum Profit Tax (PPT) and royalties increased by 9.8 per cent to N4, 365.4 billion, respectively.

The sum of N1, 132.6 billion was deducted from gross oil receipts for the Joint Venture Cash (JVC) calls, N2, 711.1 billion in respect of excess crude/PPT/royalty proceeds and “others”, leaving a net distributable balance of N4, 182.2 billion for the three tiers of government.

The yearly report, which was released by the apex bank at the weekend, noted that N387.7 billion, N167.2 billion, N373.9 billion, N150.0 billion, N560.4 billion and N284.4 billion respectively, were drawn from the Excess Crude and Excess Non-oil Accounts.

Analysis of the distribution among the three tiers of government, according to the report, showed that the Federal Government received N3.3 billion; state governments, N1.7 billion and local governments, N1.3 billion, while the sum of N774.3 billion was shared among the oil-producing states as 13 per cent Derivation Fund.

CBN said that the total Federal Government’s expenditure on SURE-P projects in 2012, stood at N72.44 billion. “This was 23.9 per cent of the approved funding required under the 2012 annual budget. The breakdown showed that the actual SURE-P intervention was largely in infrastructure development with N54.74 billion (75.6 percent of the total SURE-P expenditure) being on roads, bridges and railways. The Federal Government expended N3.80 billion on SURE-P intervention projects in Maternal and Child Health care (MCH) under the supervision of the National Primary Health Care Development Agency NPHCDA)”, it added.

The apex bank put the total output of petroleum products from the refineries at 4.23 million tonnes in 2012, representing a decrease of 13.1 per cent, when compared with the 4.87 million tonnes refined in 2011.

Nigeria requires over 35 million litres of fuel daily to meet for its use in the country.

According to the CBN, a breakdown showed that production at the Port Harcourt Refining Company (PHRC) and the Warri Refining and Petrochemical Company (WRPC) declined by 9.43 and 14.0 percentage points, respectively, while the Kaduna Refining and Petrochemical Company (KRPC) recorded an increase of 12.57 percentage points, compared with their respective levels in the previous year.

The decrease in output was attributed to the increase in pipeline vandalism and the disruptive impact of flooding on the operations of Warri and Port Harcourt refineries.

Of the total quantity of refined products, Premium Motor Spirit accounted for the largest share of 28.7 per cent, while fuel oil AGO, Dual Purpose Kerosene (DPK), Liquefied Petroleum Gas (LPG) and others accounted for 25.3, 22.5, 14.6, 2.3 and 6.6 per cent, respectively. In terms of actual output, the WRPC, KRPC and PHRC refined 1.62, 1.48, and 1.13 million tonnes of products, respectively.

The CBN put the total volume of petroleum products consumed in 2012 at 6.48 billion litres. This represented a decrease of 15.0 per cent, compared with 7.63 billion litres in 2011.

The report noted that the reduction in consumption was attributed to government intervention in the downstream sub- sector of the oil & gas industry, especially the sanitization exercise in the PMS and Kerosene subsidy payments regime.

A breakdown by product showed that PMS had the highest consumption, amounting to 4.69 billion litres (72.31 per cent). This was followed by AGO, with 0.69 billion litres (10.6 per cent), DPK, with 0.6 billion litres (9.5 per cent), LPFO, with 0.4 billion litres (6.6 per cent), LPG, with 49 million litres (0.8 per cent), and Asphalt & Others with 12 million litres (0.2 per cent).

The volume of gas the country produced in 2012 stood at 2.16 billion million standard cubic feet (mscf), representing a marginal increase of 0.6 per cent above the level recorded in 2011.

This was also attributed to the gains from increased investment in the gas-to-power initiative of 2012. Of the total gas produced, 81.8 per cent was utilized, while 18.2 per cent was flared. Out of the volume utilized, 47.3 per cent was sold to industries, including the power, cement and steel companies; 20.5 per cent was re-injected; while gas lifted accounted for 4.9 per cent of the total. Gas sold to the Nigeria Liquefied Natural Gas (NLNG) Company, gas used as fuel, and gas converted to natural gas liquids accounted for 16.0, 6.0 and 5.3 per cent, respectively. Nigeria’s aggregate crude oil production, including condensates and natural gas liquids, was put at 768.6 million barrels (mb) in 2012. This was 3.2 per cent lower than the 792.05 mb recorded in 2011.

The CBN attributed the decline to oil theft and flooding which disrupted production activities.

In terms of export, Nigeria’s crude sale was 603.9 mb, or 4.1 per cent less than the 627.8 mb exported in 2011. This was largely attributed to low demand, which resulted in as much as 20 unsold cargoes in June 2012. Domestic consumption remained at the same level of 450,000 bpd as it was in 2011.

By Roseline Okere, November 6, 2013