The Nigerian National Petroleum Corporation, NNPC made a net loss of NGN26.51 billion for the month of June. However, the corporation has given out its position on the result.
The corporation said its operations witnessed the major impact of incessant vandalism; during the month more than 261 vandalized points were recorded
NNPC said the loss was also due to the inability of its oil production subsidiary, NPDC, to realize a substantial portion of estimated crude oil sales for the month of over NGN20 billion due to Force Majeure declared by Shell as a result of the vandalized 48-inch Forcados export line.
“In addition pension intervention by CHQ (NNPC Headquarters) to bridge the funding gap as well as the one-of gratuity payment affected the performance”.
NNPC made its first trading surplus of NGN274 million in over 15 years of operations, the report clarified that the trading surplus was as a result of increase in cash flow due to increase in pump price of petrol.
“The upward review resulted to a trading surplus of N0.27bn and not ‘net profit’ because there are other expenses that ordinarily should have been netted off,” the corporation said.
The real question is, does the NNPC has a strategy on how to get out of its loss position. The answer is dependent on many variables.
The pipeline and oil installation disruptions has to be tapered. The NNPC also has to review its cost cutting measures to ensure its system is rid of over-pricing and waste.
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