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FG Generates N1.68Trn From Royalties, Fines In Oil Sector

The Department of Petroleum Resources (DPR) has reported that Nigeria collected about N1.68 trillion as revenue from oil and gas royalty, gas flare penalty, concession rentals and miscellaneous oil revenue sources between 2015 and 2017.

The Department in its just published 2017 Nigerian Oil and Gas Industry Annual Report, stated that  about N545.06 billion was earned in 2015; N437.35 billion in 2016; while N704.43 billion was earned in 2017.

A further analysis of the revenue sources captured in the report showed that on gas royalty, the country collected a total of N71.75 billion, with N22.29 billion generated from the source in 2015 compared to N16.29 billion in 2016 and N33.17 billion in 2017.

The DPR stated that Nigeria earned earned a total of N7.69billion within the period under review from gas flare penalty, with N2.59 billion; N2.33 billion; N2.77 billion collected in 2015, 2016 and 2017, respectively.

Giving a further breakdown of the revenue accruals, the Department reported that  the country generated  about N900.65 million on concession rentals, comprising N201.27 million, N342,.49 million, N356.89 million collected in 2015, 2016 and 2017 respectively.

It reported further that between 2015 to 2017, the total  miscellaneous oil revenue accruals to government coffers stood at N30.23 billion, with N17.48 billion generated in 2015; N6.40 billion in 2016 and N6.35 billion in 2017.

The report stated: “The volume of gas produced comprised of 1.73trillion cubic feet associated gas, representing 58.74percent of the gas produced and 1/21trillion cubic feet non-associated gas, representing 41.26percent of the total gas. Also 2.59trillion cubic feet (88.13percent) of the produced gas was utilized while a total of 21.02 billion cubic feet representing 0.7 percent was attributed to gas shrinkage.

“The remaining 11.04percent of the produced gas, was flared.” The report also stated that the average gas utilised in 2017 was 7.09 billion cubic feet. It added that a total of 324.30 billion cubic feet of produced associated gas were attributed to flare during the period in view.

“This increase was due to several factors which include: constant equipment upset/failures in aging facilities, sabotage, high gas/oil ratio in aging wells, funding challenges in executing gas handling projects and other operational challenges experienced by the operators”, DPR added.

It reported further stated that in 2017, a total of 754,265,049 barrels of oil were produced at an estimated average daily production of 2.07million barrels per day, representing a 5.6 percent increase over the average production rate for 2016.

In addition, the DPR reported that the total number of fields (producing and shut-in) as at the end of December, 2017 stood at 285 for the 44 oil producing companies while the average deferment for 2017 was 725,859 barrels of oil per day.

Also, it reported that the dwindling local refinery production amid the rising demand patterns for petroleum products in 2017 meant that most of the market needs for the year were met by product importation from foreign refineries.

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