Petroleum industry profit tumbles amidst oil price decline
The umbrella body of Ijaw youths, the Ijaw Youth Council Worldwide, has alleged that the Economic and Financial Crimes Commission is laying a foundation for the arrest of former President Goodluck Jonathan.
The IYC, however, advised the anti-graft agency to shelve any plan to “persecute” the former President, insisting that such a move would spell doom for the Muhammadu Buhari administration.
Speaking at a news conference on Saturday to mark the burial of a former Bayelsa State Governor, Chief Diepreye Alamieyeseigha, the IYC President, Mr. Udengs Eradiri, said most of the close allies of Jonathan had been arrested by the EFCC.
He particularly condemned the recent arrest and detention of Jonathan’s cousin and contractor, Mr. Robert Azibaola, over an alleged $40m contract fraud.
Eradiri said Ijaw youths would not allow Azibaola, Jonathan or any rising Ijaw leader to be persecuted by the EFCC, the way the Federal Government dealt with the late Alamieyeseigha.
He said, “They have arrested almost all our people. Azibaola was arrested by the EFCC and we are calling on the EFCC to stop persecuting him further and charge him to court if there are issues.
“They detained him for a long time, forcing him to make statements to indict former President Jonathan. Azibaola is a businessman, a contractor, and has the right, like every other Nigerian, to get contracts. Why will the Niger Delta case be a different one?
“We noticed that the same way they persecuted Alamieyeseigha has continued. After Goodluck Jonathan, our people who contributed to that administration, are being persecuted by this government.
“The recent one is the ploy to arrest Goodluck Jonathan, which is unfolding every day. This must stop. Goodluck Jonathan is the most performing President that Nigeria has ever had. We are proud of him.
“Every day, there is a calculated attempt to whittle down the achievements of former President Jonathan. We call on Nigerians to mount pressure on the government to focus on leading Nigeria right rather than looking for ways to bring down the achievements of Jonathan.
“Buhari should please focus on governance rather than persecution of people who have added value. We are not happy about it and today, we use Alamieyeseigha’s death as a point of contact. The world has seen that from Alamieyeseigha, it has trickled down to all the Niger Delta people.”
Speaking on the alleged removal of 10 per cent community equity from the new Petroleum Industry Bill, Eradiri asked the government to do the needful.
He added that the Federal Government ought to have known that community ownership would ameliorate the years of crises in the Niger Delta region.
The IYC President added, “For us, we will not beg for it. We will not even lobby anybody. The oil is our oil and we will take it. If they like, they should put it, if they don’t like, they should leave it. We expect that this country should have commonsense by including community participation.
“In the issue of pipeline surveillance, this 10 per cent would have covered pipeline surveillance. Once the people know that they have 10 per cent in this business, they will protect it.”
In the meantime, listed petroleum marketing companies on the Nigerian Stock Exchange (NSE) for year ended December, 2015 have reported declined in profit as a result of dwindling global crude oil prices,
The full-year financial results released by the firms recently also showed a significant decline in revenue and hike in operating expenses.
Total Nigeria Plc recorded a decline of 23.5 per cent in profit from N5.29 billion to N4.05 billion in 2015 for FY 2015, while Mobil Oil Nigeria Plc posted a decline of 23.8 per cent in profit from N6.39 billion to N4.87 billion in 2015.
According to financial reports, both companies revenue dropped by 13.5 per cent and 19.3 per cent in Total Nigeria and Mobile Oil Nigeria respectively.
The multinational companies increased in operating expenses and sluggish revenue contributed to weak earnings in the year under review.
On shareholders returns on investment, Total Nigeria declared N12.00 dividend, while Mobil Oil Nigeria shareholders are expected to approve N7.20 dividend as against N9.00 and N6.60 dividend declared in 2014 financial.
In contrast, Forte Plc and MRS Nigeria announced an impressive profit for the year following cost effectiveness in finance income generation.
Forte profit for the year rose by 30 per cent from N4.46 billion in 2014 to N5.79 billion recorded in 2015. MRS Nigeria also recorded a growth of 25 per cent in profit to N935.6 million from N746 million in 2014.
Revenue generation in 2015 was relatively on decline as MRS Oil Nigeria recorded a decline of six per cent from N92 billion to N87.1 billion. Forte Oil also recorded a decline of 27 per cent from N170 billion in 2014 to N124.6 billion recorded in 2015.
The board of Forte Oil had proposed dividend payout of N3.45k per share.
In a statement, the Group Chief Financial Officer, Forte Oil Plc, Mr Julius Omodayo-Owotuga, said the decline in revenue of 27 per cent was as a result of the company strategy to reduce importation of Premium Motor Spirit (PMS) so as to reduce the Company’s exposure to subsidy receivables from the Federal Government.
He added that, “other income increased by 190 per cent due to sale of Investment property, investment in securities held to maturity, freight income from the investment made in the 100 trucks of the previous financial year to mention a few.
“Our ability to provide a profit for our shareholders is testament to our belief that the business is on a solid and safe trajectory and will continue to consolidate on gains made.”
Analysts, however, attributed the decline in revenue to scarcity of PMS and Federal Government unclear policies in the sector, while saying that this performance would translate into decline in most companies’ profit.
The Federal Government had, late last year, reduced the price of PMS from 97 per litre to N87, another factor analysts said has effect to decline revenue.
They added that the current price of N86.50 might also impinge revenue growth in 2016.
The President, Nigeria Association for Energy Economics, Professor Wumi Iledare, had noted that the delayed subsidy payment and the FG reduction in PMS Price contributed to poor revenue and profit in 2015.
He said increased challenges in the sector have also affected oil marketing companies’ profits.
He said, “So many factors can be attributed to petroleum marketing companies’ worst performance in 2015. The federal government has failed in paying subsidy claims on time and the low price of petroleum as also contributed to decline performance.
“Scarcity of petroleum was another factor that contributed to decline in revenue. Some of these companies were selling at a higher price despite lesser quantity supplied.”
Iledare noted that it is not the responsibility of the government to import petroleum into the country for consumption
According to him, “I think the government should stop subsidizing petroleum Products in Nigeria by liberalising the sector. Government should work on the moribund refineries and let experts in the sector take charge. Let government put modality in place for environment that is conducive for business operations,” he added.
Commenting also, the Managing Director, APT Securities Limited, Mr. Kasimu Kurfi, said the unstable global oil prices have impacted negatively on petroleum marketing sector.
He said, “the price fluctuation in the global oil prices have created investors sentiment in the sector. Since the new government took over, stakeholders are yet to see serious government policies in the sector; that has affected the economy generally.
“The decline in revenue will surely affect petroleum marketing companies’ profit and investors should not expect impressive dividend by the end of 2015 accounts,” he explained.
Punch with additional report from Tribune