Nigeria reveals how much oil price plunge has hit revenue

Workers stand beside power generating structures at the Afam VI energy generation plant, operated by the Shell Petroleum Development Company of Nigeria (SPDC).
Workers stand beside power generating structures at the Afam VI energy generation plant, operated by the Shell Petroleum Development Company of Nigeria (SPDC). PHOTO: BLOOMBERG

ABUJA (REUTERS) - Proceeds from Nigeria's oil receipts fell by two-thirds between September 2014 and July this year, the state oil company in Africa's top crude producer said on Sunday (Oct 11) as it unveiled statistics aimed at improving transparency.

Africa's biggest economy, which relies on crude sales for around 70 percent of government revenues, has been hit hard by the fall in global oil prices over the last year.

"The dwindling oil price has negatively affected the NNPC (Nigerian National Petroleum Corporation) dollar contribution to the federation account," the report said. "The receipts witnessed a sharp decline of more than 67 per cent from September 2014, when the receipt was at its peak, to July 2015 with dire consequences to the federation," it said.

The report showed that total receipts for crude oil and gas exports between January and August 2015 were US$3.4 billion (S$4.75 billion).

NNPC has begun the monthly publication of provisional financial and operational reports after new chief Emmanuel Kachikwu pledged to introduce the approach as part of a drive to crackdown on corruption in the oil sector.

"Illustrated with tables, graphs and charts, the report vividly throws light into aspects of NNPC's operations that were once described as 'opaque'," said NNPC spokesman Ohi Alegbe.

Under Nigeria's constitution, NNPC is supposed to hand over its oil revenue to the federal government, which then pays back what the firm needs based on a budget approved by parliament.

Of the total receipts, US$608 million was remitted to the federation account as dollar proceeds while the balance of US$2.8 billion was used to fund joint venture cash calls for that period.

Mr Kachikwu, a former Exxon executive who was appointed NNPC chief by President Muhammadu Buhari in July with a brief to root out corruption was asked to be in the cabinet last week.

Although a specific role has not yet been assigned to him, Mr Kachikwu is expected to become state minister of petroleum to oversee daily operations under Buhari. The president told Reuters he would keep the petroleum portfolio for himself.