The Nigerian National Petroleum Corporation, NNPC, says the cost of producing crude oil in Nigeria was reduced by $5 dollars within the last one year.
The Group Managing Director, Maikanti Baru, said on Tuesday in a podcast to the corporation’s staff to mark his one year in office adding that the company was able to lower its production/operating costs from $27 per barrel to $22.
Also, he said the corporation secured over $2 billion discounts from renegotiated upstream contracts with its joint venture partners as part of its cost-cutting efforts in executing projects during the period.
“We will pay attention to cost reduction and efficiency as key features in our upstream industry operations. The Corporation’s target is to attain a six-month contracting cycle,” Mr. Baru said in the 25-minute podcast.
He said each of the corporation’s autonomous business units, ABUs, and corporate services units, CSUs, have been directed to focus on efficiency in order to realize the key performance indicators in the 2017 budget.
On NNPC’s achievement in the past year, the GMD said there were significant increases in crude oil reserves and production, with the national average daily production at 1.83 million barrels of oil and condensate, or average production currently hovering around 1.88 million barrels.
With improved security in the Niger Delta and resumption of production on the Forcados Oil Terminal, FOT, and Qua Iboe Terminal, QIT, pipelines, he said average national production was expected to grow and surpass the 2017 target of 2.2million barrels of oil and condensate per day.
In October last year, Mr. Baru said the Owowo Field, located close to the producing ExxonMobil-operated Usan Field, was found.
He said the strategic location of the oil field, currently estimated to have reserves of one billion barrels of crude oil, could allow early production through a tie-back process to the Usan Floating Production Storage and Offloading, FPSO.
He added that the Nigerian Petroleum Development Company, NPDC’s, daily production capacity had grown during the year from 15,000 barrels to about 210,000 barrels as at June 2017.
He said the ownership of Oil Mining Licence, OML13, had been restored to NPDC following a presidential intervention, with first oil output from the well expected before the end of the year.
Besides, the GMD said the NNPC JV partners have agreed to pursue new projects following the conclusion of negotiations and agreements aimed at the repayment of JV cash call arrears up to end 2015 by all the international Joint Venture Companies, JVCs.
In the gas sector, the GMD said gas supply to power plants and industries in the Country had increased significantly.
Other achievements he cited included completion of repairs on vandalized 20-inch Escravos Lagos Pipeline System A in August 2016 which increased Chevron Escravos Gas plant supply from zero to 259 million standard cubic feet per day.
This he added helped in the completion of repairs of the vandalized Chevron offshore gas pipeline in February 2017, which equally increased the company’s gas supply to 430MMscf/d.
Other vandalized pipelines that were repaired according to the NNPC boss included the 48-inch Forcados Oil Terminal, FOT export gas pipeline in June 2017 used to restore gas supply to Oredo Gas Plant, Sapele Gas Plant, Ovade Gas Plant, Oben and NGC Gas Compressors, and equally the NPDC’s Utorogu non-associated gas, NAG 2 and Oredo EPF 2 gas plants.
“The effect of these efforts was a significant growth in domestic gas supply in the last few months. Domestic gas supply has also increased from an average of 700MMscf in July 2016 to an average of 1,220MMscfd currently, with about a seventh of the volume supplied to thermal power plants.
“A lot of Generation Companies (GENCOs) are rejecting gas due to the inability of Transmission Company of Nigeria (TCN), to wheel out the power generated,” Mr. Baru added.
On oil exploration in the Chad Basin, Mr. Baru said huge resources had been deployed to the Benue Trough, with exploration activities, including seismic data acquisition ongoing by Integrated Data Services limited, IDSL, to grow the country’s reserve base.
“We are working with the security agencies for an early return to the Chad Basin. Drilling activities will be a priority on resumption while continuing with seismic data acquisition with improved parameters,” he said.
In the Downstream sector, Mr. Baru said NNPC had stabilized the market with sufficient products supply through modest local refining and the Direct Supply Direct Purchase, DSDP, scheme, which, he noted, saved government about N40 billion in 2017.
He said efforts were ongoing to secure third party financing aimed at revamping the refineries to ensure they operate at their full operational capacities.
Support PREMIUM TIMES' journalism of integrity and credibility
Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.
For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.
By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.
TEXT AD: To advertise here . Call Willie +2347088095401...