The Nigerian National Petroleum Commission Limited posted a $1.21 billion deficit in funding its priority project between January and June 2022.
According to data from the firm analysed by ThisDay, the monthly forecast for cost recovery and funding of government priority projects was $536 million while the total projected spending for the purpose for the whole of 2022 was pegged at $3.21 billion.
The company’s data however revealed that for the period, whereas over $500 million was budgeted for each month as the sum to be spent, $333.4 million was expended in January, but it fell drastically to $18.1 million in February.
The funding for priority projects rose again in March, hitting $294.3 million and $150.5 million in April. The funding was $113.3 million in May and $249.8 million in June.
The default is coming amid increasing cash crunch and the inability of the organisation to meet its monthly financial obligation to the federation, comprising the federal, state and local governments which operate a joint account.
In 2021, the company posted a deficit of over $2.6 billion for cost recovery and priority projects, although it budgeted about $5.8 billion for the purpose.
While through cost recovery, a party is able to recoup its capital and operating costs out of a specified percentage of production, the NNPC also has major oil and gas projects meant to boost the country’s production.
Some of the projects, which have been on for years include domestic gas development initiatives, frontier exploration, renewable energy and the Nigeria/Morocco pipeline.
They also include the Gbaramatu IPP/Excravos power plant, upgrade and rehabilitation of Delta IV, upgrade of Oben metering, Sapele metering station, Ajaokuta metering station as well as construction of Egbin 500mmscfd gas facility.
In addition, the NNPCL had previously listed the construction of the West Niger Delta project, Asa north Ohaji project, Excravos/Lagos pipeline expansion, OB3 supply lines as well as the Ajaokuta-Kaduna-Kano (AKK) project as some of its priority projects. Also listed was the Brass LNG, although funding has since dried up for the project.
In all, a shortfall of $94.7 million was recorded in January, $398.7 million in February, $213 million in March and $214.3 million in April.
In addition, in May, the NNPCL defaulted to the tune of $171.4 million while in June, it was $124 million.
