"Subsidy gulps Nigeria\u2019s oil income as Norway reaps profit"

" \n Subsidy gulps Nigeria\u2019s oil income as Norway reaps profit \n \n\n \n While some of its peers including Abu Dhabi National Oil Company (ADNOC) and Norway\u2019s Equinor have reported bumper profits, the\u00a0 Nigerian National Petroleum Company \u00a0Limited (NNPC) is struggling to generate enough oil revenue to cover petrol subsidy costs, which increased by 50 percent in the first six months of 2022. \n \n\n \n With oil prices trading at over $100 per barrel, over 60 percent higher than a year earlier, national oil companies are reaping tens of billions of dollars due to a major surge in prices fuelled by the conflict in Eastern Europe and a months-long Western sanctions spree on Russia, a major global exporter. \n \n\n \n Within the same period, new data from NNPC showed the federal government\u2019s insistence on selling petrol well below half of the actual market price means Nigeria\u2019s subsidy bill has risen by 51 percent from N210 billion in January 2022 to N319 billion in June 2022. \n \n\n \n \u201cDiscussion surrounding Nigeria\u2019s subsidy is getting stale; Norway, a country with an average of 2 million bpd, is boasting of significant earnings and more forward-thinking discussions,\u201d said Luqmon Agboola, head of energy and infrastructure at Sofidam Capital. \n \n\n \n Findings by BusinessDay showed Nigeria\u2019s NNPC has the same oil production capacity as Norway\u2019s Equinor. Equinor posted nearly $6.8 billion in net profit between April and June, up from $1.9 billion in the same period of 2021. Second-quarter sales more than doubled to $36.5 billion, Equinor said. \n \n\n \n \u201cEquinor continues to provide high gas production from the NCS, including volumes from Hammerfest LNG, now safely back in production. Solid operational performance and high production combined with high prices resulted in strong financial results with adjusted earnings of more than 17 billion dollars before tax,\u201d said president and CEO Anders Opedal. \n \n\n \n Equinor\u2019s board of directors has also decided to initiate a third tranche of share buybacks of $1.83 billion and increase the 2022 share repurchase programme from previously communicated up to $5 billion to up to $6 billion. \n \n\n \n In the United Arab Emirates, the state-owned oil company\u2019s net profit for the first half jumped by 34 percent to $379 million, while revenue increased 13 percent to $1.27 billion compared to the same period last year. \n \n\n \n \u201cExcellent half-year results and successful strategic execution are testaments to the vital role that the company is playing in enabling significant production capacity growth for ADNOC as well as the UAE\u2019s objective to achieve gas self-sufficiency,\u201d Sultan Al Jaber, ADNOC\u2019s managing director, said. \n \n\n \n The company\u2019s first-half earnings before interest, taxes, depreciation and amortisation (EBITDA) was $580 million, up 16 percent year-on-year, with a market-leading margin of 45.7 percent. Also, its EBITDA increased by 7 percent in the second quarter to $300 million for the period compared to the previous quarter. \n \n\n \n Saudi oil giant Aramco saw its second-quarter net income surged to $48.4 billion, up from $25.5 billion a year earlier. \n \n\n \n \u201cOur record second-quarter results reflect increasing demand for our products \u2014 particularly as a low-cost producer with one of the lowest upstream carbon intensities in the industry,\u201d Aramco President and CEO Amin Nasser said. \n \n\n \n Brazil\u2019s Petrobras smashed second-quarter profit and margin estimates, boosted by divestments and higher margins in its fuel and natural gas businesses, according to the firm\u2019s financial statements. \n \n\n \n In a securities filing, Petr\u00f3leo Brasileiro, as the company is formally known, posted a quarterly net income of $8.86 billion, above Refinitiv\u2019s estimate of $8.44 billion and almost 40 times greater than the same quarter last year. \n \n\n \n The company\u2019s EBITDA, adjusted for certain non-recurring factors, came in at $19.07 billion, up 58 percent in annual terms and well above the Refinitiv\u2019s estimate of $16.1 billion. \n \n\n \n In comments accompanying the figures, Petrobras attributed its results to strong Brent prices, as well as improved margins in its natural gas and fuels business, which includes gasoline, diesel and various other petroleum derivatives. \n \n\n \n \u201cNigeria seems stuck with perennial issues while other state-owned companies are acting proactively to recent market development,\u201d said Kelvin Atafiri who runs Cavazanni Human Capital Limited, an investment firm exposed to the oil and gas sector. \n \n\n \n Pedro Omontuemhen, partner at PwC Nigeria, said the debate about liberalising petroleum products pricing should be an important discussion in the ongoing political activity climate. \n \n\n \n \u201cThe real issue is the political decision \u2013 whether to liberalise the price or not. That is the biggest issue our politicians are not talking about,\u201d he said. \n \n\n \n Omontuemhen said the country must be willing to pay the market price and fix its refinery to solve its subsidy problem. \n \n\n \n NNPC has failed to make remittances to the Federation Account Allocation Committee (FAAC) this year as the petrol subsidy bill surpassed oil earnings. \n \n\n \n According to the national oil company, the value shortfall (subsidy) on the importation of petrol recovered from June 2022 proceeds is N319.17 billion while the outstanding balance carried forward is N1.4 trillion. \n \n\n \n \u201cThe estimated value shortfall of N1.4 trillion (consisting arrears of N 479 billion-plus estimated June 2022 value shortfall of N1 trillion) is to be recovered from July 2022 proceed due for sharing at the August 2022 FAAC Meeting,\u201d it said. \n "

"Subsidy gulps Nigeria\u2019s oil income as Norway reaps profit"

Government Urges Multichoice Ghana to Cut DSTV Subscription Prices by 30% Amid Cedi AppreciationAMP

Ownership of Ghana’s Black Volta Gold Project in Question Amid Acquisition ControversyAMP

Tech Titans Ellison, Bezos, and Zuckerberg Add $13 Billion in Single-Day Wealth Surge Amid Market RallyAMP