NNPC Rallies Operators, Others to Caution Oil Production Cost
The Nigerian National Petroleum Company Limited (NNPC) has called on operators, service providers in the nation’s oil and gas industry towards tackling the menace of high production cost and improving profitability in the sector.
The Chief Upstream Investment Officer of the NNPC Upstream Investment Management Services (NUIMS), Mr. Bala Wunti, gave the hint during a panel session at the just-concluded Nigeria Oil and Gas (NOG) Energy Week 2023, held in Abuja.
Wunti, who lamented the impact of high oil production cost on the operators and government revenue, warned that the menace would lead to the collapse of oil business in the country.
“We have always said that if you don’t pull down cost, cost will pull you down. If you don’t kill cost, cost will kill the business. And so, we are working together with the service providers to see how can we optimise cost and change the narrative from being the highest cost environment in the upstream sector globally to a competitive environment,” Wunti stated.
He said the Nigerian oil and gas industry was in dire need of quality contractors, adding that there was also a need to upscale the capacity middlemen and women involved in the contracting chain of the sector.
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Warning about the dangers of losing quality international contractors in the guise of trying to build local capacity, he stressed the need to create a balance between the two.
“I think that’s what we are working for. Nigerians would learn to be mentored as much as possible because some people have been there for centuries. We can’t just within five years and 10 years want to overtake them when we don’t have the money, we don’t have the capacity and we need to build that.
“And once we do that, our contracting all over will be more efficient, and when it is more efficient, it will bring down the cost and with all other measures in place, Nigeria will certainly be the destination of all, “Wunti noted.
