—Cuts Losses by 16.19 percent
The combined installed capacity utilization of the Nigerian National Petroleum Corporation’s refineries located in Port Harcourt, Warri and Kaduna increased by about 29 percentage points in January 2017 compared with their performance in December 2016.
In the latest of the Corporation’s Monthly Financial and Operations Report for January released in Abuja, Monday, NNPC said the capacity utilization of the refineries rose to 36.73 per cent in January, 2017, as against 7.55 percent in the previous month of December, 2016.
The report attributed the improvement to the implementation of the 12 Business Focus Areas (BUFAS) strategy introduced by the Group Managing Director, Dr. Maikanti Baru.
According to the report, the refineries benefitted from the introduction of a new Refineries Business Model under the 12 BUFAS strategy which has transformed them from “tolling plants to merchant plants” thereby placing them on the path of profitability.
The Port Harcourt Refining Company (PHRC ) and Warri Refining and Petrochemical Company (WRPC) also posted surpluses of Five Billion, One Hundred and Fifteen Million Naira (N5,115,000,000) and Four Hundred and Four Million Naira (N404,000,000) respectively.
Under the new refinery model, each refinery purchases crude oil at export parity price, processes and sells the corresponding products on its own account.
“This is different from the previous Tolling Plant model where the refinery does not take title to the crude, but rather charges a tolling/processing fee to the owner of the crude which was PPMC on behalf of the Corporation”, the report stated.
Apart from PHRC and WRPC, five other subsidiaries of the Corporation also posted surpluses. These include the Nigerian Petroleum Development Company (NPDC), the Nigerian Gas Pipelines and Transport Company (NGPTC), NNPC Retail, the National Engineering and Technical Company (NETCO), and the Integrated Data Services Ltd (IDSL).
According to the document which is the 18th in the series of Monthly Financial and Operations Reports since the NNPC began publishing its business transactions, the Corporation recorded a Two Billion, Seven Hundred and Fifty Million Naira (N2.75billion)reduction in its trading deficit in the period under review putting the total trading deficit atN14.26billion.
“This represents about 16.19 per cent improvement compared toN17.01billion recorded in December, 2016, in spite of the Corporation’s challenging situations which limit its aspiration to profitability”, the report stated.
It listed some of the factors that impeded the Corporation’s performance to include the production shutdown of the Trans Niger Pipeline and Nembe Creek Trunkline due to leakages; the shutdown of Agbami Terminal for a mini Turn-around-Maintenance; and the subsisting Force Majeure declared by SPDC as a result of the vandalized 48-inch Forcados export line after its restoration in October 17, 2016.