The three ailing refineries managed by the Nigerian National Petroleum Corporation (NNPC) have failed to process crude oil for three months now. Also, the consolidated financial performance of the facilities recorded losses for 13 months back to back.
The Warri Refining and Petrochemical Company, Port Harcourt Refining Company and Kaduna Refining and Petrochemical Company were reportedly inactive between July and September.
Nigeria losing oil revenue: Consolidated capacity utilisation of the facilities was 0% in each of the three months because of the dormant operation.
This means the facilities posted losses for 13 straight months in its consolidated financial performance. During the period, the highest single consolidated loss posted by the refineries was in June 2019 with the loss of N17.4 billion.
The Warri Refining and Petrochemical Company, Port Harcourt Refining Company and Kaduna Refining and Petrochemical Company produced -9,599MT of intermediate products at a combined capacity utilisation of 0% in August 2019.
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A report on the operations of the facilities stated that, “Similar to last month, combined yield efficiency is 0.00% owing largely to ongoing rehabilitation work in the refineries.
“The declining operational performance recorded is attributable to the ongoing revamping of the refineries, which is expected to further enhance capacity utilisation once completed.”
It was also stated that since January 2017, the NNPC had been adopting a Merchant Plant Refineries Business Model.
“The model takes cognizance of the products worth and crude costs. The combined value of output by the three refineries (at import-parity price) for the month of September 2019 amounted to N1.03 billion.
“No associated crude plus freight cost for the three refineries since there was no production, while operational expenses amounted to N11.24 billion. This resulted in the current operating deficit of N10.20 billion and an adjusted deficit of 7.07 billion by the refineries, after adjusting for prior overstated deficits by the PHRC.”