Although insecurity in the country and other macroeconomic challenges, coupled with uncertainty in the global economy, may have continued to take a toll on the Nigerian Exchange Limited (NGX), increasing global demand for crude has spurred the performance of five leading indigenous oil and gas companies quoted on the exchange.
Specifically, these firms achieved N103.57 billion profit before tax in nine months ended September 30, 2022, representing 68.2 per cent increase from N61.57 billion recorded in the corresponding period in 2021.
The companies are Seplat Energy Plc, Conoil Oil Plc, TotalEnergies Marketing Nigeria Plc, Eterna Plc, and MRS Oil Nigeria Plc.
According to the financial statements of the five oil and gas firms, only the performance of TotalEnergies Marketing was negatively affected by both endogenous and exogenous challenges currently impeding the country’s business environment as the firm witnessed a decline in profit before tax to N18.78 billion in nine months of 2022 from N19.72 billion in nine months of 2021.
In the global market, the average price of crude per barrel as of September 30, 2021 stood at $67.71 compared to the average price of the same product at $104.81 as of September 30, 2022.
Consequently, the Nigerian market witnessed an increase in price of Premium Motor Spirit (PMS) or petrol to an average price of N179.42 in nine months of 2022 against an average price of N166.29 in the corresponding year of 2021, according to the National Bureau of Statistics (NBS).
The average retail price of Automotive Gas Oil (diesel), according to the NBS in September 2022 was N789.90 per litre, an increase of 210.20 per cent from N254.64 per litre recorded in the corresponding month of the previous year.
The five companies grew revenue by 34 per cent to N847.28 billion in nine months of 2022 from N632.34 billion reported in nine months of 2021.
For instance, Conoil reported 67.5 per cent increase in profit before tax to N3.93 billion in nine months of 2022 from N2.3 billion in nine months of 2021, while MRS Oil Nigeria recorded an unprecedented surge in profit before tax to N1.49 billion in nine months of 2022 from N306.98 million in nine months of 2021.
Seplat Energy reported 100.56 per cent increase in profit before tax from N38.63 billion in nine months of 2021 to N77.47 billion in the corresponding period of 2022, while Eterna announced 244.66 per cent increase in profit before tax from N566.89 million to N1.9 billion in nine months of 2022.
Operators at the weekend linked the oil and gas companies’ performance to margin increase in price of petrol, diesel and lubricant, stressing that the impact is felt in the NGX Oil & Gas Index that has outperformed other NGX sectoral indices.
The development also impacted positively on the NGX Oil & Gas Index on the Exchange, which appreciated by 31.78 per cent as at November 11, 2022, while the NGX All-Share Index (ASI) recorded a Year-to-Date gain to 2.93 per cent.
Reacting to the performance, the chief executive officer, Seplat Energy, Roger Brown, said despite an unusually challenging quarter for the Nigerian oil and gas industry, with key export routes being unavailable because of force majeure, the firm had demonstrated a high level of resilience in its business.
“The Amukpe-Escravos Pipeline has been operational since August and we have had our first oil export this month. The Trans Forcados Pipeline has now resumed operations and we continue to increase our use of alternative export routes, giving us confidence that the final quarter of the year will show some improvement in volumes.”
President of Investors Alternative Dispute Resolution Initiative (IADRI), Moses Igbrude said, “it is a good performance and an excellent result. This is despite the unfavorable economic environment where the government is a competitor and sole importer of petrol, coupled with forex shortage, kudos to them.”
He urged the listed firms to focus more on their competitive advantage areas such as lubricant production, diesel import, insecticide production as well as car services business and any other areas where they can make good margins in their business operations.
Igbrude also urged them to do everything within their powers to manage operational cost effectively to consolidate on their performance.