In furtherance of its drive towards profitability, the Nigerian National Petroleum Company (NNPC) Limited last week announced a trading surplus of N141.96 billion recorded in June 2021, compared to a deficit of N37.46 billion in May 2021.

This is despite the corporation having its revenue for the month of June, 2021 stand at N894.64 billion, a 9.04 percent drop from the May figure.

According to NNPC, a trading surplus or trading deficit is derived after deduction of the expenditure profile from the revenue for the period under review.

A statement by the Group General Manager, Group Public Affairs Division at NNPC, Mr. Garba Deen Muhammad explained that data was contained in the June 2021 figures of the NNPC Monthly Financial and Operations Report (MFOR).

The statement read in part: “In June 2021, NNPC Group operating revenue as compared to May 2021, decreased by 9.07 percent or N89.27 billion to stand at N894.64 billion. Similarly, expenditure for the month decreased by 29.32 percent or N299.44 billion to stand at N721.93 billion.

“Thus, in the period under review, expenditure as a proportion of revenue was 0.81 percent, compared to the figure in May which stood at 1.04 per cent.

“The report also noted that the increase in trading surplus was due mainly to the increased sales of crude oil and gas by the Nigerian Petroleum Development Company (NPDC), an upstream subsidiary of the NNPC, and the increased gas sales and depreciation postings by the Nigerian Gas Company, NGC.

“The positive outlook was further bolstered by the performance of Duke Oil and the Nigerian Gas Marketing Company (NGMC) which also added to the improved bottom line.

It may, however, take a long time for the state oil company to prove beyond doubt that the N287 billion it declared for the year 2020 is not an outcome of manipulation.

This is in the light of strong arguments that came from individuals and groups who insisted that “the magic that led to eventual declaration of profit after tax in 2020 for the first time in its (NNPC’s) 44-year history requires explanations.”

President Mohammadu Buhari, who doubles as the Minister for Petroleum Resources, had announced the declaration of Profit After Tax of N287 billion by the NNPC, noting that the corporation’s losses were reduced from N803 billion in year 2018 to N1.7 billion in year 2019 before the eventual declaration of net profit in year 2020.

Buhari had said, “I am pleased to announce the declaration of Profit After Tax of N287 billion in year 2020 by the NNPC. This is sequel to the completion of the statutory annual audit exercise for year 2020.

“The NNPC losses were reduced from N803 billion in year 2018 to N1.7 billion in year 2019 and the eventual declaration of net profit in year 2020 for the first time in its 44-year history.

“This development is consistent with this administration’s commitment to ensuring prudent management of resources and maximisation of value for the Nigerian people from their natural resources.”

Buhari also noted that the development was a fulfillment of an earlier pledge by the federal government to publicly declare the financial position of the NNPC.

For the first time since its establishment, NNPC, in June and October, respectively, last year, made public its Audited Financial Statement (AFS) for 2018 and 2019. It noted in the documents that it had achieved a 99.7 per cent reduction in its loss profile from a whopping N803 billion in 2018 to N1.7 billion in 2019.

According to the documents, although, a number of the corporation’s 21 subsidiaries recorded losses, the general administrative expenses of the national oil company witnessed a 22 per cent decrease, from N894 billion in 2018 to N696 billion in 2019.

Specifically, the NNPC recorded a loss of N20.2 billion in 2019. Details of the consolidated statement of account for the year ended December 31, 2019 showed a comprehensive loss of over N16.3 billion by the corporation and N20.2 billion by the group. In 2018, the corporation recorded over N203.2 billion in losses while the group lost about N68.95 billion.

However, the report said recurring losses by the NNPC over the years had culminated in an accumulated loss of about N1.55 trillion and N474 billion respectively, compared to N1.6trillion (group) and N490.7billion (corporation) in 2018. The report warned that the NNPC may be pushed into bankruptcy by its unsustainable operational processes.

Some of the corporation’s subsidiaries, which posted improved performance in its last audited results, included the Nigerian Petroleum Development Company Limited (NPDC), which recorded N479 billion profit in 2019, compared to N179 billion in 2018, representing a 167 per cent increase. In addition, the Integrated Data Sciences Limited (IDSL) recorded a N23 billion profit in 2019, compared to N154 million in 2018, representing over 14,966 per cent increase, while the Petroleum Products Marketing Company (PPMC) recorded N14.2 billion profit in 2019, compared to N9.3 billion in 2018, representing 52 per cent increase.

The Minister of State for Petroleum Resources, Timipre Sylvia, had described the development as “monumental achievement,” saying that the NNPC worked hard to reach the milestones.

The Group Managing Director of NNPC, Mele Kyari, explained that the company adopted some cost-cutting measures and became more efficient, after renegotiating contracts and bringing initial values down by about 30 per cent, while focusing on accountability, transparency and avoiding elusive projects.

Disclosing that the process that paved the way for the profit started in 2015 with continuous implementation of strategies, Kyari added: “It is a continuous process. When I came on board, I learnt from what was on ground, and also brought in a new perspective, which was to ensure that we build on what had been done.”

He added that the corporation on the heels of the COVID-19 pandemic introduced a technology that drastically cut travel cost through a reduction in in-person meetings and the general automation of processes that enhanced efficiency across the group’s businesses.