The Nigerian National Petroleum Corporation, NNPC, has released its latest monthly financial and operations report for January, which revealed that the capacity utilization of the corporation’s refineries rose to 36.73 per cent in January 2017, as against the 7.55 per cent recorded in the previous month.
The report released in Abuja on Monday has it that the combined installed capacity utilization of the 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 a statement signed by its spokesman, Mr. Ndu Ughamadu, the state oil firm attributed the improvement to the implementation of the 12 Business Focus Areas, BUFAS, strategy introduced by the Group Managing Director, Dr. Maikanti Baru.
The refineries were said to have 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 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,” read part of the report.
Aside 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 the monthly 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 at N14.26billion.
“This represents about 16.19 per cent improvement compared to N17.01billion recorded in December, 2016, in spite of the Corporation’s challenging situations which limit its aspiration to profitability,” it disclosed.
The report listed some 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-Maitenance; 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.