Cost Of Oil Theft, Pipeline Vandalisation Hit N159bn In One Year
At the backdrop of the huge costs and losses attributable to product theft and facility vandalisation, the Nigerian National Petroleum Corporation, NNPC, has indicated that it would still be financially stable in the current year to next year.
The national oil firm also indicated that its operations would not be fundamentally hampered by the adverse impact of the Coronavirus (COVID-19) Pandemic on the global oil industry.
The Corporation stated that expenses and losses associated with oil theft and pipeline vandalisation was N159 billion in 2019.
According to its 2019 financial report, crude oil and petroleum products losses, valued at N32 billion were recorded in the year under review, while pipeline repairs and management costs gulped N127 billion.
The NNPC noted that these funds were deducted from its earnings before remittances were made to the federation account, adding that it made total cash payment of N1.428 trillion to the Federation Account.
Though the NNPC noted that the COVID-19 pandemic would impact certain areas of its finances, it noted, however, that the overall impact on its financial stability would not be severe.
It said the Corporation operates in the essential class of the economy and still enjoys the privileges of arrangements to draw funds from the escrow account.
It further noted that there were no plans to liquidate any of its operations or to cease trading in the near future, apparently at the backdrop of intensified efforts towards passage of the Petroleum Industry Bill and the attendant unbundling of the Corporation.
The NNPC stated: “In the light of these recent developments and its underlying impact, it is expected that the impact of the COVID-19 pandemic will extend towards the following areas of the financial statements: revenue, trade receivables and accounts payable.
“Management is confident that the financial impact of the pandemic will not be severe as the group operates in the essential class of the economy and the arrangement to draw from the escrow account has not been withdrawn.”