Group Managing Director Nigerian National Petroleum Corporation (NNPC Mele Kyari at the weekend stated that the ₦287bn it posted earlier as profit after tax in the 2020 financial year was as a result of some unprecedented fiscal disciplinary measures it embarked upon.
.
The clarification is coming hours after the corporation had for the first time since its establishment 44 years ago made an after taxation profit of N 287 billion
This was disclosed in a statement signed by NNPC’s acting Group General Manager, Group Public Affairs Division, Garba Deen Muhammad
The President explained that NNPC losses were reduced from N803 billion in year 2018 to N1.7 billion in year 2019, paving way for the eventual declaration of net profit of ₦287bn in year 2020, adding that the declaration was “in fulfillment of an earlier pledge by the federal government to publicly announce the financial position of the corporation.
The NNPC boss, Kyari, attributed the turn-around of the Corporation from a loss of ₦803bn in 2018 to profit of ₦287bn in 2020 to the aggressive implementation of cost-cutting measures, improved efficiency through business automation, emphasis on commercially-focused investments and non-interference in the management of the Corporation from any quarters.
He also added that the Corporation saved a lot of cost through contract renegotiation by up to 30% on the heels of the Covid-19 pandemic, introduction of technology that drastically cut travel cost through reduction in in-person meetings and the general automation of processes that enhanced efficiency across the group’s businesses.
He said Management’s focus on the prioritisation of investment and staff welfare also helped in boosting the corporation’s overall productivity and bottom line.
Speaking earlier while kick-starting the press conference, the Alternate Chairman of the NNPC Board of Directors and Minister of State for Petroleum Resources, Timipre Sylva, who joined the press conference virtually, congratulated the GMD, Management and staff of the Corporation on the feat of posting profit for the first time since its incorporation in 1977.
He said NNPC’s emergence from loss into profitability, coming shortly after the signing into law of the Petroleum Industry Bill, was a proud moment for him, adding that this was a season of achievements for the nation’s oil and gas sector.
Members of the NNPC Board, Chief Pius Akinyelure, Mallam Mohammed Lawal, Dr. Tajudeen Umar and Mrs Lami Onayi Ahmed, who were also present at the event, also echoed the Minister and congratulated the management and staff of the corporation on the feat achieved.
However some industry operators have interrogated this development asking that NNPC as a corporation and entity to point to any productive or trading activities that is executed in 2020 to generate and report such huge profits of N287bn in 2020 from a consistent 6 years loss positions ( 2015 to 2020).
He said what Melee Kyari Presented as profit from direct NNPC operations and activities is actually a retention of 20% of the profits and dividends paid by independent entities, which the NNPC received on behalf of the federation ( FGN, States and LGAs). This is the first time they are allowed to retain such.
He alleged that before now, the FGN and the states used to collect 100% of all the dividends paid by these independent entities . But in 2020 the NNPC decided to retain the 20% from the dividends paid the the NLNG, the NGC, the West African Gas Pipeline ( Operated by Chevron) etc and consolidated same in their balance sheet.
He stated that what they reported were retained portions of the dividends paid by other entities for the Federation.
