Following recent development in the global oil market, the Nigerian National Petroleum Corporation (NNPC) says it is taking measures to bring down cost of crude oil production to $10 per barrel or below.
According to the Corporation’s Chief Operating Officer (COO), Ventures and Business Development, Mr. Roland Ewubare, terrain peculiarity is an important factor in determining cost, noting that issues such as pipeline vandalism and crude oil theft, among others, were some of the factors peculiar to the Nigeria terrain that drive up crude oil production cost in the country.
In view of this, he said, the NNPC was looking very closely at such variable as logistics, security and transportation with a view to reducing cost of production to $10 and below per barrel.
He disclosed that much had been done over the years in the area of reducing contracting cycle which used to be a major factor responsible for high cost of production. He stated that the National Petroleum Investment Management Services (NAPIMS) achieved a six-month contracting cycle under him as Group General Manager.
Group Managing Director, of the Corporation, Mr Mele Kyari, had in a recent press interview advanced a similar position where he stressed that NNPC was working assiduously to bring down the cost of crude oil production to not more than $10 per barrel by 2021.
Meanwhile, amidst speculations of non-compliance with the production cuts agreed upon by the OPEC and its non-member allies, Mr. Ewubare affirmed that Nigeria was in full compliance with the agreed output cuts, saying reports including Nigeria on the list of non-compliant countries were not true.
Mr. Ewubare explained that though Nigeria’s total production capacity was 2.3million barrels per day (mbpd), it was currently producing only about 1.4mbpd in compliance with the OPEC+ production quota, stressing that what makes up the little extra over the 1.4mbpd figure being bandied around for Nigeria was condensate which is usually not computed as part of production in OPEC quota.