..as group seeks ways to boost revenue via Nigeria-Morocco Gas Pipeline

Offshore subsidiaries of the Nigerian National Petroleum Company Limited (NNPCL) contributed 37 percent of the group’s revenue in 2022, an analysis of the group’s audited financial statement for the period ended 31 December 2022 has shown.

NNPCL was incorporated in Nigeria on September 21, 2021 as a limited liability company under the nation’s Company and Allied Matters Act (CAMA) as mandated by the Petroleum Industry Act (PIA) of 2021, and has the mandate to engage in all commercial activities relating to the petroleum industry in Nigeria.

According to its financial statement for 2022, NNPCL has six foreign subsidiaries incorporated in different countries. The NNPC Trading Services (UK) was incorporated in the United Kingdom where it controls 100 percent stake in the company. The firm provides logistics services to Duke Oil Incorporated just as the functional currency is the British Pounds.

NNPC Trading SA was incorporated in Panama where NNPCL has 100 percent stake in the firm. The firm is into the marketing of crude oil petroleum products while the functional currency is the United States dollars.

The Wheel Insurance Company was incorporated in Guernsey, Channel Island and provides reinsurance cover in respect of excess capacity of NNPC oil assets transferred and NNPCL has 100 percent stake in the firm. Its functional currency is the United States dollars.

NNPCL has 62.35 percent in N-Gas that was incorporated in Bermuda. This firm provides shipment and delivery of gas services to NNPCL and its functional currency is the US dollars.

NIDAS Shipping Services Limited provides shipping and marine transportation services to NNPC. It was incorporated in the United Kingdom and NNPCL has 99 percent stake in the company which has its functional currency as the US dollars.

NNPC Trading DMCC was incorporated in the United Arab Emirates to trade refined oil products, petrochemicals, crude oil and liquefied natural gas. Its functional currency is the UAE’s dirham. NNPCL controls 100 percent stake in the company.

Further analysis of the NNPCL’s 2022 revenue in terms of geographical markets showed that the domestic subsidiaries of NNPCL generated N5.56 trillion revenue out of N8.82 trillion, implying that the nation’s oil and gas company made 63 percent of its revenue through domestic subsidiaries while those from offshore companies generated N3.26 trillion, representing 37 percent of the revenue.

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Out of the offshore subsidiaries, 34.1 percent of the NNPCL’s total revenue in 2022 came from Panama. Revenue from that country equally amounted to 92.3 percent of the total revenue generated through offshore subsidiaries.

Still on offshore subsidiaries, 0.04 percent of NNPCL’s 2022 revenue came from the United Kingdom; 1,47 percent from the Bahamas; 1,14 percent from Dubai, the United Arab Emirates, and 0.19 percent from Cayman Island.

Cost of sales gulped N6.71 trillion from NNPCL’s revenue in 2022, with the bulk spent on petroleum products. The group paid N618.8 billion as royalties to the Federal Government of Nigeria, as well as paid N251.97 billion as crude handling and port charges.

In terms of profitability, the group realised N2.52 trillion as profit after tax in 2022. When this was added to incomes from other sources, most especially exchange differences on translation of foreign operations, as well as other incomes, NNPCL ended 2022 with a total comprehensive income of N4.68 trillion.

Out of this, N4.68 trillion is attributed to the owners of the company while N1.44 billion is attributed to the non-controlling interest in the company.

Meanwhile, the group has continued to explore initiatives that will boost its income generating capacity. Just last week, it held talks with the representative of the Moroccan government towards fast-tracking the completion of the Nigeria-Morocco Gas Pipeline which was initiated in 2017.

According to the NNPCL, the bilateral talks were held between the Honourable Minister of State for Petroleum Resources (Gas), Hon. Ekperikpe Ekpo, and the Moroccan Minister of Energy Transition and Sustainable Development, Leila Benali. It was anchored by the NNPC Limited’s Executive Vice President, Gas, Power & New Energy, Olalekan Ogunleye, and the Director General of the Morocco National Office of Hydrocarbons and Mines (ONHYM), Mme Amina Benkhadra.

The Cooperation Agreement for the 48” x 5,300Km pipeline from Nigeria to Dhakia (Morocco) and 1,700km from Dhakia to Northern Morocco was signed in 2017 with a capacity of 30 billion cubic meter (bcm) per year (equivalent to 3.0 billion standard cubic feet of gas per day).

The pipeline would traverse Republic of Benin, Togo, Ghana, Cote d’Ivoire, Liberia, Sierra Leone, Guinea, Guinea-Bissau, Gambia, Senegal, Mauritania, and terminate in Morocco with a spur to Spain.