The Nigerian National Petroleum Corporation (NNPC) yesterday announced that it has saved the nation a minimum of $3billion yearly from the reduction in the cost of crude oil production.
According to the corporation’s statement, it has driven down the cost of crude oil production from $78 per barrel as at August 2015 to $23 per barrel, representing 70.5 per cent reduction. The Group General Manager of the National Petroleum Investment Management Services (NAPIMS), a unit of NNPC, Dafe Sejebor, disclosed this during the inauguration of the unit’s Anti-Corruption Committee.
Sejebor said NAPIMS arrived at the figure after looking at the difference between the $78 and $23, which represents the old and new cost of production in relation to the present daily average production in the country.
He said: “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 $3billion in the upstream for both Production Sharing Contracts (PSCs) and Joint Ventures (JVs).”
The GGM said the target was to bring the cost of production to between $17 and $19 for onshore and offshore production respectively.
He 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, Sejebor said it was necessitated by the increasing difficulty in operating the industry within the framework of the old Petroleum Act in the face of the delayed passage of the Petroleum Industry Bill (PIB).
He said the policy would restore investors confidence in the industry pending the full passage of the entire PIB by the National Assembly.