11 October 2017

Nigeria: Govt Rules Out Possibility of Building New Refineries

The Federal Government has ruled out the possibility of building new refineries to compliment the four existing ones in Nigeria.The Minister of State for Petroleum Resources, Ibe Kachikwu, who made this known in an online media chart with journalists recently, said government has no immediate plans to build new refineries.

He disclosed that the Federal Government is currently planning to refurbish the existing ones, which have 450,000 barrels in terms of combined capacity.Kachikwu attributed the current drop in the price of Premium Motor Spirit (PMS) to market forces. "Anything can affect the pricing either way as recently seen in the United State where the hurricane induced an almost 15 per cent increase in crude oil prices. Efficiency of refineries will definitely help to bring down price of PMS", he added.

Meanwhile, the Nigerian National Petroleum Corporation (NNPC) has announced a total export receipt of $471.90 million for the month of July 2017 as against $219.34 million posted in June 2017.

According to the July edition of the Monthly Financial and Operations Report of the Corporation, which was made public on Thursday, contribution from crude oil amounted to $392.20 million while gas and miscellaneous receipts stood at $64.72 million and $14.98 million respectively. .

Group General Manager,. Group Public Affairs Division, Ndu Ughamadu said that the report indicated that of the export receipt, $108.09 million was remitted to the Federation Account while $363.81 million was remitted to fund the Joint Venture cash call for the month of July, 2017, to guarantee current and future production.

Providing a broader perspective, the report noted that the total export of crude oil and gas receipt for the period of July 2016 to July 2017 stood at $2.77 billion. Out of that, the sum of $2.31 billion was transferred to JV cash call in line with the budget and the balance of $0.46 Billion was paid to Federation Account.

The NNPC observed that the low receipt was due to the twin effects of production disruption in Niger-Delta and low crude oil prices during the period.On naira payments to the Federation Account, the NNPC announced that the Domestic Crude Oil and Gas receipt during the month amounted to N145.83 billion, consisting of N5.56 billion from Domestic Gas and the sum of N140.27 billion from Domestic Crude Oil. It was noted that out of the naira receipt, the sum of N56.30 billion was transferred to Joint Venture Cash Call (JVCC) being a first line charge and to guarantee continuous flow of revenue stream to Federation Account.

In all, the Federation Crude Oil and Gas liftings are broadly classified into Equity Export and Domestic. Both categories are lifted and marketed by NNPC and the proceeds remitted into the Federation Account.

Equity Export receipts, after revision for Joint Venture (JV) Cash Calls, are paid directly into Federation Account domiciled in Central Bank of Nigeria (CBN). Domestic crude oil of 445,000 barrels per day is allocated for refining to meet domestic products supply.

Payments are effected to Federation Account by NNPC after adjusting crude & product losses and pipeline repairs & management cost incurred during the period.

NNPC also lifts crude oil and gas, other than equity and domestic crude oil, on behalf of the Department of Petroleum Resources (DPR) and the Federal Inland Revenue Services (FIRS), proceeds of which are remitted into Federation Account.

The Third Party finance liftings are Crude Oil and Gas liftings from fields that are financed using alternative finance/loan facility which require the servicing of debt obligations before remitting the balance into the Federation Account.

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