By Ediri Ejoh
THE Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru has explained that the country needs an increment of at least 1billion barrels in reserves and half a million barrels in incremental production capacity per day year-on-year, for it to achieve the 40 billion barrels of crude oil reserves and meet the government’s 2020 production target of 4 million barrels per day.
Baru, while speaking at the 14th Annual Aret Adams Memorial Lecture in, Lagos on the topic titled: “Find More, Produce More”, through the Chief Operating Officer, Gas and Power, Mr. Saidu Mohammed, said, “Considering our quest for revenue generation as a nation, we need to increase our exploration efforts in order to sustain our reserve base and grow production.”
He charged industry stakeholders to invest in exploration activities, especially now that crude oil price is low “so that when the tide turns, all we would need to do is to turn on the taps.”
He said NNPC would continue to make investments that are geared towards increasing the national hydrocarbon reserves and daily crude oil and gas production, adding that in this respect, the Corporation was committed to propelling power, industrial and agricultural sectors, through an adequate provision of gas to power and sustainable feedstock to fertilizer and petrochemical industries.
The GMD also said the NNPC had renegotiated it’s deep offshore rig-rate from a staggering $580,000 to $164,000 per day, saving the country a 71.7 percent cost of executing a similar operation in the past.
He said the corporation had achieved a 35 per cent downward review of rig rates per day for both swamp and land operations in its portfolios.
A rig rate is a major cost element incurred by an Exploration and Production (E&P) company in the course of drilling for oil or gas in deep offshore, shallow offshore, swamp, land areas or basins.
He said these reductions were also effected in NNPC’s Unit Technical Cost (UTC) over the period and that the various reductions served as an incentive for investors to grow reserves, increase profitability and improve Return On Investment (ROI), adding that they also boost government revenue, thus improving government’s commitment to developmental projects across the country.
“I am proud to announce that our UTC has significantly dropped from above USD70 per barrel in 2014, to about USD27 per barrel, as at year end 2016. Indeed, NNPC is committed to further driving down the UTC”, Baru stated.
Also speaking, the Chairman of the occasion and former Minister of State for Petroleum, Mr. Odein Ajumogobia, said there was no better time to discuss increased oil production than now.
Chairman of the Aret Adams Foundation, Mr. Egbert Imomoh, said Nigeria should position itself for the future by finding more oil and producing more of the black gold.