Oil Production Cost Drops by 71 Percent

• Oil Production Cost Drops by 71 Percent

The Nigerian National Petroleum Corporation on Wednesday said it had driven down the cost of crude oil production from $78 per barrel as of August 2015 to $23 per barrel, representing a 70.5 per cent fall.

The Group General Manager, National Petroleum Investment Management Services, a unit of the NNPC, Dafe Sejebor, disclosed this during the inauguration of the anti-corruption committee of the unit, adding that the country had saved a minimum of $3bn per annum.Sejebor said NAPIMS arrived at the figure after looking at the difference between the $78 and $23, representing the old and new cost of production in relation to the current daily average production in the country.

He was quoted in a statement issued by the corporation’s spokesperson, Ndu Ughamadu, as saying “If you knock down your cost of production from $78 per barrel to $23, take the difference and multiply by the average daily production, you will discover that we are saving a minimum of $3bn in the upstream for both Production Sharing Contracts and Joint Ventures.”

He said the target was to bring the cost of production to $17 and $19 for onshore and offshore production, respectively.

Sejebor commended the Federal Government for its support to the NNPC management in tackling the challenges in the petroleum industry, especially the cash call exit agreement signed in 2016 and the reduction of contracting circle from three years to six months.

On the new petroleum policy, he said it was necessitated by the increasing difficulty in operating the petroleum industry within the framework of the old Petroleum Act in the face of the delayed passage of the Petroleum Industry Bill.

Sejebor said the policy would restore investors’ confidence in the industry pending the full passage of the entire PIB by the National Assembly.

On the NAPIMS anti-corruption committee, he urged the management and members of staff to let the principles of accountability, integrity, honesty and transparency be their watchword.

He charged them to generate positive ideas to help tackle the challenges facing the industry.

The Group Managing Director, NNPC, Maikanti Baru, while inaugurating the anti-corruption unit at the oil firm’s corporate headquarters recently, had directed all the Strategic Business Units and Corporate Service Units to establish their own anti-corruption committees.

NAPIMS was the first to comply with the directive, Ughamadu said.