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NNPC saves $3bn, cut oil production cost to $23/barrel

By Michael Eboh

The Nigerian National Petroleum Corporation, NNPC, Wednesday, said it has saved the country over $3 billion annually, since August 2015 and had been able to drag down the cost of crude oil production from $78 per barrel as at August 2015 to $23 per barrel, representing a 70.5 per cent reduction.

According to a statement by the NNPC in Abuja, Group General Manager of one of its subsidiaries, the National Petroleum Investment Management Services, NAPIMS, Mr. Dafe Sejebor, disclosed this during the inauguration of the Anti-Corruption Committee of the unit.

He disclosed that the target of the organization was to bring down the cost of crude oil production to between $17 and $19 for onshore and offshore production respectively.

Sejebor stated that NAPIMS arrived at the $3 billion savings after looking at the difference between the $78 and $23, which represented 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 $3 billion in the upstream for both Production Sharing Contracts, PSC, and Joint Ventures, JV.”

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.

Also commenting on the new Petroleum Policy, Sejebor 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, PIB.

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

Furthermore, he urged the management and staff of NAPIMS and members of the Anti-Corruption Committee 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 and help reverse its fortunes.

He admonished staff to key into the NNPC management’s zero tolerance for corruption.

The NNPC stated that NAPIMS was the first to comply with the directive of the Group Managing Director of the NNPC, Mr. Maikanti Baru, asking all the the NNPC Strategic Business Units (SBU) and Corporate Service Units (CSU) to establish their own anti-corruption committees.


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