By Dayo Omoogun
The Nigerian National Petroleum Corporation (NNPC) is taking measures to bring down cost of crude oil production to $10 per barrel or below, the Corporation’s Chief Operating Officer (COO), Ventures and Business Development, Mr. Roland Ewubare, has said.
The cost of production currently hovers around $21 per barrel, according to authoritative sources.
A press release by the Group
General Manager, Group Public Affairs Division of the corporation, Dr. Kennie Obateru, stated that Mr. Ewubare made the declaration Friday on a Channels TV breakfast programme, Business Morning.
The COO explained that some of the factors responsible for the comparatively higher cost of crude oil production in Nigeria such as pipeline vandalism and crude oil theft, among others, are peculiar to the Nigerian terrain.
He, however, stated that NNPC was looking very closely at such variables as logistics, security and transportation with a view to reducing cost of production to $10 and below per barrel.
He disclosed that much had been done over the years in the area of reducing contracting cycle which used to be a major factor responsible for high cost of production, stressing that the National Petroleum Investment Management Services (NAPIMS) achieved a six-month contracting cycle under him as Group General Manager.
Mr. Ewubare affirmed that Nigeria was in full compliance with the agreed output cuts, saying reports including Nigeria on the list of non-compliant countries were not true.
“There’s some confusion in the
market around the parameters for the production cuts. Nigeria has a full production capacity of about 2.3mbpd. We are currently producing between 1.6 and 1.7mbpd. Our OPEC quota as a result of the cuts is about 1.4mbpd. You and I know that condensate is not included in the computation of the cut numbers. So what we have is 1.4mbpd of crude oil. The little you see above 1.4mbpd is made up of condensate which does not count as part of the basis for assessing our OPEC quota”, Ewubare clarified.
NNPC Group Managing Director, Mallam Mele Kyari, in a recent interview advanced a similar position where he stressed that NNPC was working assiduously to bring down the cost of crude oil production to not more than $10 per barrel by 2021.