Nigeria earned $34b from gas, oil in 2019 – NEITI

 The revenue is 4.88 per cent higher than the $32.63 billion realised in 2018.

Nigeria realised $34.22 billion from the oil and gas sector in 2019, the Nigeria Extractive Industries Transparency Initiative (NEITI) has disclosed in its latest audit report.

 The report showed the revenue was 4.88 per cent higher than the $32.63 billion realised in 2018.

 The 2019 report covered 98 entities, including 88 oil and gas companies, nine government agencies and the Nigerian Liquefied Natural Gas (NLNG).

 A breakdown of the earnings showed that payments by the companies accounted for $18.90 billion, while flows from the government’s sales of crude oil and gas accounted for $15.32 billion.

 Details of the report showed that 10 years (2010-2019) aggregate financial flows from the oil and gas sector to the government amounted to $418.544 billion, with the highest revenue flow of $68.442 recorded in 2011, while the lowest revenue flow of $17.055 was recorded in 2016.

 According to NEITI, the total crude oil production in 2019 was 735.244 mmbbls (million barrels of oil or natural gas liquids), representing an increase of 4.87 per cent over the 701.101mmbbls recorded in 2018.

Production sharing contracts (PSCs) contributed the highest volumes of 312.042 mmbbls followed by Joint Venture (JV) and Sole Risk (SR) which recorded 310,284mmbbls and 89.824mmbbls respectively. Others are Marginal Fields (MFs) and Service Contracts (SCs) which accounted for 21,762mmbbls and 1,330mmbbls respectively.

 Similarly, the sum of N126.664 billion was incurred by the Corporation as costs for pipeline repairs and maintenance which showed a difference of N96.378billion from the approved sum of N30.287billion for that purpose.

 The report also pointed out that N31.844 billion was also deducted for crude and product losses due to theft and sabotage in 2019.

 On gas production, the NEITI report showed that 3,047,507.32 mmscf was produced in 2019. This represents an increase of 4.8percent when compared to the 2,909,143.56mmscf reported in 2018. In addition, $247.794million was realized from gas sales for the year under review.

 The 2019 oil and gas report also explained that the total cash call for 2019 was $5.512billion (US$2.898 billion and N797.324billion). There was an outstanding Cash-call legacy liability of $1.900billion as at 31st December 2019.

 Recommendations

The report made recommendations on how to improve transparency and accountability in the sector.

Some of the recommendations were that the Office of the Accountant General of the Federation (OAGF) should advise the NNPC to prepare its budget on a gross basis by stating its gross revenue and costs.

 The report also noted that the practice, if adopted, will improve transparency and accountability in NNPC’s transactions on behalf of the federation.

 It recommended that NNPC should carry-out detailed reconciliation on transportation revenues regularly as a mechanism for checks and balances. It also observed that entities are reporting crude losses higher than the fiscalised production and recommended that the DPR should take steps to reduce losses by the terminal operators.

 It also highlighted the outstanding liabilities by companies as of 2019 year end and advised the respective government agencies to recover the debts.