Although the Nigerian Market Limited (NGX) may have continued to suffer from national insecurity, other macroeconomic difficulties, and economic uncertainty, rising worldwide demand for crude has boosted the performance of five major indigenous oil and gas businesses listed on the exchange.
In particular, these businesses increased their profit before tax by 68.2% from the N61.57 billion they reported during the same time in 2021 to N103.57 billion in the nine months that concluded on September 30, 2022.
These businesses are MRS Oil Nigeria Plc, TotalEnergies Marketing Nigeria Plc, Eterna Plc, Seplat Energy Plc, and Conoil Oil Plc.
Only TotalEnergies Marketing’s performance, which saw a decline in profit before tax to N18.78 billion in the first nine months of 2022 from N19.72 billion in the first nine months of 2021, was negatively impacted by the endogenous and exogenous challenges currently impeding the country’s business environment, according to the financial statements of the five oil and gas firms.
The average price of crude per barrel on the world market was $67.71 as of September 30, 2021 as opposed to $104.81 as of September 30, 2022 for the same product.
The National Bureau of Statistics reports that as a result, the price of Premium Motor Spirit (PMS) or petrol in Nigeria increased, reaching an average price of N179.42 in the first nine months of 2022 compared to an average price of N166.29 in the equivalent year of 2021. (NBS).
According to the NBS, the average retail price of automotive gas oil (diesel) in September 2022 was N789.90 per litre, up 210.20 percent from N254.64 per litre reported in the same month the year before.
The combined revenue of the five companies increased by 34% to N847.28 billion in the first nine months of 2022 from N632.34 billion in the same period the previous year.
Conoil, for instance, reported a 67.5% increase in profit before taxes to N3.93 billion in the first nine months of 2022 from N2.3 billion in the same period the previous year, while MRS Oil Nigeria reported an unprecedented increase in profit before taxes to N1.49 billion in the same period the previous year from N306.98 million.
While Eterna revealed a 244.66 percent increase in profit before tax from N566.89 million to N1.9 billion in nine months of 2022, Seplat Energy claimed a 100.56 percent increase in profit before tax from N38.63 billion in nine months of 2021 to N77.47 billion in the same period of 2022.
Operators stressed that the impact is seen in the NGX Oil & Gas Index, which has outperformed other NGX sectoral indices, during the weekend when they linked the success of oil and gas firms to margin increases in the price of gasoline, diesel, and lubricants.
The adjustment had a beneficial effect on the NGX Oil & Gas Index on the Exchange as well, which increased by 31.78% as of November 11, 2022, while the NGX All-Share Index (ASI) had a gain of 2.93% Year-to-Date.
Roger Brown, the chief executive officer of Seplat Energy, commented on the performance and said that despite an unusually difficult quarter for the Nigerian oil and gas industry due to the closure of key export routes due to force majeure, the company had shown a high level of resilience in its operations.
“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.”
“It is a good performance and an exceptional result,” Investors Alternative Dispute Resolution Initiative (IADRI) President Moses Igbrude remarked. Kudos to them for doing this in spite of the tough economic climate where the government is a rival and the only importer of gasoline.
He asked the listed companies to concentrate more on their comparative advantages, such as the manufacturing of lubricants, the importation of diesel, the production of insecticides, the provision of automobile services, and any other sectors where they can generate healthy profit margins.
Igbrude challenged them to consolidate on their performance by doing everything in their ability to manage operational costs properly.