The Group Managing Director of NNPC, Dr Maikanti Baru, said this on Friday in Abuja at the 2016 Fiscal Liquidity Assessment Committee Retreat.
Baru made a presentation on “Global Oil Prices, Militancy and Terrorism and its Impact on Government Revenue in Nigeria’’. He said that apart from security challenges in the region, politics, judiciary, oil prices and production cost continued to impact negatively on the oil industry.
“Over 7000kpd of crude oil has been lost due to vandalism this year. A bulk of the loss is from JV assets. “This implies that 60 per cent of oil production lost is NNPC-FGN equity. “At an estimated price of 45 dollars per barrel, the total 2016 revenue loss to the Federation Account translates to about 7 billion dollars.
“This is money that the government could have used to achieve major infrastructural milestones. “ This loss is equivalent to a new 7,000mw power plant; new 350kpd refinery; over 30 per cent of National budget; and a new 1,700 kilometre pipeline,’’ Baru said. To resolve this, Baru said the NNPC planned to increase security of oil and gas assets, improve its community social responsibility and the Amnesty programme.
He said the NNPC planned “to renegotiate terms of Production Sharing Contract with deep offshore operating companies because with the current agreement, only 17.7 per cent of total revenue comes to government’’.
The Minister of Finance, Mrs Kemi Adeosun, said that the ministry had succeeded in reducing Federal Government’s monthly wage bill from N165 billion to N142 billion by eliminating 33,000 ghost workers.
Adeosun, represented by the Head of the Efficiency Unit at the Ministry, Mrs Patience Oniha, said that the ministry had discovered that it could also save money by reviewing government’s procurement processes. She said that through the Efficiency Unit, the ministry had succeeded in negotiating huge discounts for government officials travelling on local and international flights for official assignments.
Adeosun said that the ministry had also been able to save cost by banning sitting allowances, souvenirs at government’s functions and unnecessary adverts which had contributed to the high recurrent expenditure in government.