- Sylva, petroleum minister, launches NUCOP
- At current $30 for its JV, and $20 for PSC, Nigeria far outshoots Saudi Arabia’s $2.80
The Nigerian National Petroleum Corporation (NNPC) has called on stakeholders in the oil and gas industry to join in working towards reducing operations cost to achieve the $10 or less per barrel production cost target.
NUCOP is an industry-wide initiative designed to optimize Nigeria’s upstream operating expenses through process enhancement and industry collaboration to ensure improved and sustainable profitability for all stakeholders.
Kyari said, “It is in our informed interest to optimize our cost of production. The realities of energy transition and investor choices are very much clear to us. There is nowhere in this world where a less cost-efficient operator can survive today”.
He called on industry players to adopt such measures as transparency, collaboration, efficiency and shared services to help in driving down production cost in order to meet the target.
Kyari said that under the NNPC operational theme for the year known as ‘execution excellence,’ the corporation would achieve a contracting cycle of six months or less which would help create efficiency and drive down unit operating cost to sub $10 per barrel level.
Nigeria, Africa’s top oil producer, currently battles with average cost for its Joint Venture production at below $30 per barrel, while that of production sharing contract (PSC) production hovers below $20 per barrel. This far outshoots Saudi Arabia, a fellow OPEC member, which production cost per barrel of crude oil is $2.80.
Timipre Sylva, the minister of state petroleum resources, lamented that there was need for the country to achieve cost optimization in order to keep its oil and gas industry afloat.
“Today’s engagement with industry stakeholders under the NUCOP, is part of the resolve of this administration to confront this challenge of high production cost. I expect robust discussions and a realistic roadmap to achieve the cost optimisation objectives,” the minister said.
Meanwhile, the chairman of Senate committee on oil industry’s upstream, Bassey Akpan, said the 9th National Assembly would pass the Petroleum Industry Bill (PIB) to provide a conducive environment for all operators in line with global best practices.
Leaders of agencies, trade groups and labour unions in the oil and gas sector such as the Nigerian Content Development and Monitoring Board (NCDMB), Oil Production Trade Section (OPTS), Independent Petroleum Producers Group (IPPG), Petroleum Technology Association of Nigeria (PETAN), Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), who spoke at the event, described the initiative as a good one, with each group pledging to support the NUCOP.
