November 30, 2021

NNPC To Reduce Contract Cycle From 18 To Six Months

3 min read

…….Nigeria’s oil production dips to 1.6m bpd

The Nigerian National Petroleum Corporation (NNPC) Limited is reducing its contracting cycle from 18 to six months, the Managing Director of its subsidiary, National Engineering and Technical Company (NETCO), Johnson Awoyomi, said yesterday.

He said the NNPC also aims to reduce the Unit Operating Cost of crude oil production to $10 per barrel.

According to Awoyomi, cost optimisation is the driving force behind NNPC’s profitability.

He believes the enactment of the Petroleum Industry Act (PIA) was a game-changer for the petroleum sector to enhance the commercial, profit and sustainability of the NNPC and its subsidiaries.

Awoyomi spoke during an interactive session with young engineers at the ongoing Nigerian Association of Petroleum Explorationists (NAPE) Conference in Lagos.

The NETCO chief said: “In 2020, when others were facing losses, NNPC was able to break a 44-year jinx by declaring a N287 billion profit.

“What the management of the NNPC did was to improve cost-effectiveness by ensuring that operating cost was reduced while also improving profit accruing to the national oil company.

“These huge profits were made as a result of the NNPC’s top management deployment of cost-optimisation initiatives.”

Awoyomi noted that cost optimisation was very critical in the face of challenges facing the industry caused by the COVID-19 pandemic and global energy transition.

He advised the young engineers to imbibe the principles of cost engineering, which is devoted to the management of project cost, which involves activities as estimating, cost control, cost forecasting, investment appraisal and risk analysis.

Also, the Chief Executive, Nigeria Upstream Petroleum Regulatory Commission (NURC), Gbenga Komolafe said Nigeria’s oil production had declined to an average of 1.6 million barrels per day (bpd).

He spoke during the International Conference and Exhibition of the Nigerian Association of Petroleum Explorationist (NAPE) Annual International Conference and Exhibition with the theme ‘’Petroleum exploration and production in a new world: What next after the global crisis’’, in Lagos.

Akomolafe said the decline in production could be attributed to theft, insecurity, aging facilities, decline in exploration and production enhancement initiatives.

He however said as the upstream technical and commercial regulator, the commission was committed to addressing these issues to increase the country’s reserves to 40 billion barrels and raise production to three million barrels daily through some measures.

These include initiation of Public-Private Partnership (PPP) involving the security agencies, private operators and other stakeholders to address the challenging issues of crude oil theft, sabotage and pipeline vandalism

He said collaboration between operators, communities and the deployment of state-of-the-art technology to monitor pipelines in remote areas was on course. Already, as a commission, we have commenced consultation with relevant stakeholders towards the achievement of these objectives, he added.

He said the commission is making provisions to incentivize drilling targets at deeper horizons and to also provide guidelines to ensure seismic acquisition design to image deep plays.

Komolafe added that attractive incentive was being made to encourage multi-client and speculative data companies to acquire state-of-the-art data in open acreage to facilitate exploration activities.

The NURC chief noted that the pandemic created an unprecedented global crisis that caused countries and companies to experience a reaction, resilience, and adjustment for a new reality.

He said the upstream petroleum sector was not left out on the impact of the COVID-19 pandemic, which according to him did not only affect the global oil market, but also, endangered the health and safety of the environment and its workforce.

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