‘$23bn crude revenue, N1trn subsidy cost’ — highlights of NEITI’s oil and gas report

On Monday, the Nigeria Extractive Industries Transparency Initiative (NEITI) unveiled its 2021 oil and gas report, which provides information and data on the sector.

Speaking at the event in Abuja, Orji Ogbonnaya-Orji, executive secretary of NEITI, said the report covered a total of 69 companies and the Nigeria Liquefied Natural Gas (NLNG).

It also covered  13 government entities and one state-owned enterprise — the Nigerian National Petroleum Company (NNPC) Limited, he said.

The report, Ogbonnaya-Orji said, comprehensively reviewed, ascertained, reconciled, and identified all revenues and investment flows in the oil and gas sector in 2021.

“The report reviewed processes that characterised all transactions within the sector,” he added.

TheCable brings you some key highlights in the report.

‘NIGERIA EARNED $23.04 BILLION REVENUE IN 2021’

The NEITI report said the total revenue from the oil and gas sector in 2021 was $23.04 billion.

This was an increase of 12.82 percent in total revenue collections when compared with the 2020 revenue of $20.43 billion, the report added.

The $23.046 billion revenue was expected to be remitted to the federation for 2021.

“However, NLNG dividend of US$722.596 million, miscellaneous revenue of US$859,583 and transportation, revenue of US$24.332 million which all form part of the total revenue reported were not remitted to the Federation Account,” the report reads.

NEITI said total collections from sales of crude oil, gas, and feedstock were $12.56 billion in the period, representing 54.50 percent of the total revenue.

‘NIGERIA PRODUCED 566.13 MILLION BARRELS OF CRUDE IN 2021’

According to the report, Nigeria recorded a total “fiscalised” crude oil output (including condensates) of 566.13 million barrels.

The figure represents a 12 percent reduction from the volume produced in 2020 (646.79 million barrels).

“The production figure of 566.13million barrels in 2021 was the lowest when compared with the figures recorded in the previous four years,” NEITI said.

“This is followed by the year 2020 with a production figure of 647 million barrels, while 2019 had the highest production figure of 735.24 million barrels.”

According to the report, 54 companies produced crude oil in 2021, totalling a metered production of 634.60 million barrels.

However, due to production adjustments, measurement error and theft/sabotage, the report said 68.47 million barrels were lost — leaving a balance of 566.13 million barrels as fiscalised production for 2021.

‘COMPANIES LOST 37.57 MILLION BARRELS OF CRUDE TO THEFT’

NEITI also said a total of 29 companies lost 37.57 million barrels of crude due to theft and sabotage.

The agency explained that crude oil losses occur as a result of theft, sabotage and/or metering error, which lead to a reduction in the volume of fiscalised production for a period of time.

According to the report, theft and sabotage occurred in three terminals, namely; Forcados, Brass, and Bonny.

Bonny, the organisation said, had the highest volume of theft (28.91 million barrels) accounting for 31 percent of metered production into the terminal. 

“This is followed by Forcados which experienced theft in the volume of 7.12 million barrels amounting to 9% of metered production into Forcados,” the transparency initiative added.

“Brass Terminal had the least volume of theft with 1.54 million barrels amounting to 7% of metered production, although production stopped in some fields in May.

“Cumulatively, a total of 37.57 million barrels of crude oil was lost to theft and sabotage in 2021, making 19% of production delivered into Bonny, Brass and Forcados Terminals.”

To abate future occurrences, NEITI advised the federal government to ensure proper pipeline security surveillance using satellite imagery and other sophisticated “ICT tools to ensure real-time monitoring and decisive actions on pipelines”. 

‘PETROL SUBSIDY GULPED N1.15 TRN IN 2021’

In 2021, according to the report, the total petrol subsidy approved by the federation accounts allocation committee (FAAC) was N1.78 trillion.

However, N1.15 trillion was deducted from FAAC as subsidy, also known as under-recovery.

“The 2021 deductions was 767% higher than the amount charged in 2020 (N133,739,479,395.15),” NEITI said.

“NAPIMS, in its 2021 AFS, claimed that the significant increase in cost of under recovery as compared to the last period was because, crude oil price fell significantly in 2020, leading to low landing cost in several months (April, May, July – December 2020).” 

‘NNPC FAILED TO REMIT $1.95 BILLION IN 2021’

NEITI said the total unremitted revenue in the accounts of the NNPC totalled $1.951 billion.

They include $286.423 million unremitted export crude sales; $871.145 million unremitted domestic crude sales; $722.596 million LNG dividend; $859,583 miscellaneous revenue; $24.332 million transportation revenue; and $45.758 million unremitted domestic gas proceeds.

“The portion of total revenue that was eventually available for sharing by the Federation in accordance with the revenue allocation formula is in the sum of US$13.200billion representing 57.27% of total revenue collected compared to 71.70% in 2020,” the report reads.

In its recommendation, NEITI charged the NNPC to transparently disclose details of the subsidy and the beneficiaries of the payments, in addition to rendering accounts on the loan transaction.