Nigeria to save $31.4bn yearly from lower oil production cost –NNPC GMD

Nigeria will be saving about $31.4 billion yearly as the NNPC plans downward review of oil production cost before the end of 2017, according to its Group Managing Director, Maikanti Baru.

The GMD, who was represented at a one-day seminar in commemoration of Aret Adams in lagos on Friday, by the Chief Operating Officer, Gas and Power, Mr. Saidu Mohammed disclosed that NNPC has renegotiated its deep offshore rig-rate from $580,000 to $164,000 per day, which would see Nigeria save about 71.7 per cent cost of executing similar operations currently.

Baru added that the corporation had already achieved about 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.

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He declared: “The various reductions serve as an incentive for investors to grow reserves, increase profitability and improve Return On Investment (ROI), adding that they also boost government’s revenue, thus improving its commitment to developmental projects across the country.”

On the NNPC challenges, Baru said: “Within the period we took over the reign of leadership in the Corporation, we have been able to drive down cost to a very commendable level, despite all challanges.

“But to achieve the 40 billion barrels of crude oil reserves and a production of four million barrels per day, as planned by government by 2020, the country needs an incremental of at least one billion barrels in reserves year-on-year till 2020, and at minimum, half a million barrels in incremental production capacity per day within the same timeframe.

“Considering our quest for revenue generation as a nation, it is a given that we need to increase our exploration efforts in order to sustain our reserve base and grow production,” he noted.

Baru said NNPC would continue to make investments that are geared towards increasing the national hydrocarbon reserves and daily crude oil & 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.

Also speaking at the event, 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.

This year’s Aret Adams Annual Lecture Series is the fourteenth, seeking to immortalise the ideals of Chief Godwin Aret Adams who was former GMD of NNPC, and Adviser on Petroleum to former Head of State, General Abdulsalami Abubakar between 2008 and 2009.

Adams died 15 years ago.

 

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