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Refineries lose N14bn in one month

By on April 11, 2016

The amount of crude oil processed by Nigeria’s three refineries slumped by 224,342 metric tonnes between January and February 2016, the latest financial and operations report of the Nigerian National Petroleum Corporation indicated.

It also showed the consolidated revenue from the facilities nosedived by N14.17bn.

Nigeria’s refineries include Warri Refining and Petrochemical Company; Kaduna Refining and Petrochemical Company; and Port Harcourt Refining Company.

Similarly, the combined operating profit of the three refineries decreased by N4.83bn during the period under review, the report indicated.

A study of the individual performance of the refineries showed that the revenue of the WRPC fell drastically from about N5.3bn recorded in January to as low as N2.43m in February this year.

The WRPC posted an operating loss of N967.28m at the close of business in February, after recording an operating profit of N4.39bn in the preceding month.

For the KRPC, the facility’s revenue also decreased from N4.24bn in January to N1.03bn in February, as it recorded operating losses of N2.12bn and N1.51bn in January and February, respectively.

Although the third refinery, the PHRC, did not record any operating loss at the close of business in the review period, it posted a decrease in revenue and net cash flow in February.

Specifically, the PHRC recorded a drop in revenue from N12.86bn generated in January, down to N7.21bn in February, while its net cash flow dropped from N3.4bn to N3.32bn.

Hence, the consolidated revenue of the three refineries decreased by N14.17bn, down from N22.41bn generated in January to N8.24bn in February.

Their combined operating profit also dropped to N839.75m in February, as against the N5.67bn profit posted in the first month of 2016.

Sunday PUNCH had reported that the processing of crude oil by Nigeria’s refineries fell by 87.4 per cent in February when compared to the volume of crude refined by the three facilities in the preceding month.

In January this year, the total crude processed by the refineries was 256,676 metric tonnes, but this dropped by 224,342MT or 87.4 per cent to 32,352MT in February 2016.

The NNPC attributed the poor performance of the refineries to crude pipeline vandalism. It had repeatedly complained about the menace perpetuated by pipelines vandals.

Similarly, operators in the oil and gas industry, as well as those in the power sector, on several occasions, had blamed the abysmal performances of power plants and refineries on vandalism of both gas and crude oil installations by miscreants.

The Executive Director, Association of National Electricity Distributors, the umbrella body for power distribution companies in Nigeria, Sunday Oduntan, had told our correspondent that part of the reasons Nigerians experienced poor power supply and petrol scarcity was the vandalism of pipelines.

Although Nigerian refineries produce less than half of the about 40 million litres of petrol consumed daily across the country, their meagre production is often used to meet the needs in a few cities in Nigeria.

Despite the poor performance of the refineries, the Group Executive Director/Chief Operations Officer, NNPC Downstream, Mr. Henry Ikem-Obih, said the facilities would commence production this April.

He said, “Most of the work being done at the refineries is on site, that is, just getting them ready to start cracking crude so that they too can start contributing to the amount of fuel we have to distribute across Nigeria. We have to ensure that within the month of April, we have some local refineries contributing to the amount of fuel we have to distribute across the country.

“The work will be across the three locations and they are all at various stages of start-up. And in terms of moving them to their optimal yield, there is a lot of work going on and we are hoping that within this month (April, we will also have locally produced fuel as part of what people are buying at the pumps.”

 

[Punch]