We’re Expecting The Drop Of Crude Production To $15 per barrel, Says NNPC
The Nigerian National Petroleum Corporation (NNPC) is expecting the cost of producing crude oil to drop from $20 to $15 per barrel soon.
It said it would ensure that the pipes for the construction of the 683-kilometre Ajaokuta-Abuja-Kaduna-Kano gas pipeline, approved by the Federal Executive Council (FEC), were sourced from pipe mills in adherence to the Nigerian Content Law.
NNPC’s Group Managing Director Dr Maikanti Baru said this became necessary to bring down the cost of producing fuel and make the product available.
He spoke during the technology and innovation expo organised by the Ministry of Science and Technology in Abuja.
Represented by NNPC Chief Operating Officer Mr. Seidu Mohammed, Baru said the corporation had been innovative, hence the drop in the production cost per barrel of oil.
Baru said: “What NNPC will like Nigerians to know is the drive we are making to bring down costs. The more we bring down the production cost of oil and gas, the more money that comes eventually to the federal government and the pockets of the states and local governments. That is the kind of thing we are trying to do.
‘’NNPC has been innovative in its efforts to bring down the cost. Many Nigerians don’t even know that we have started the local content drive. We have brought down the cost of producing a barrel of oil to the neighbourhood of $20 and our target is to make sure we are at $15 and we continue to match forward.”
The NNPC last August said it reduced the cost of oil production from $78 to $23 per barrel, representing a 70.5 per cent drop in production cost.
Baru also explained at the expo that the corporation would continue to work with agencies, such as the Nigerian Content Development Management Board, (NCDMB), to ensure that the cost of production in the oil and gas sector is competitive.
He said: “Engineering and technology are the bedrock of oil and gas, without that we may not have been where we are today. But then, what have we been doing at the NNPC? We have been trying to make sure that all the activities are domiciled in Nigeria.
“There was a time even tender documents had to go to London for evaluation, but today, we have fully domesticated the engineering aspect of it.
“We have, in collaboration with the Nigerian Content Development Management Board gone ahead to get Nigerians who are innovative and willing to invest in fabrication.
“In other words, what we want to do is to also domesticate the big chunk of where we spend the money, that is procurement, and we have gone far.
“There are fabrications in areas of line pipes and valves. What we are doing in NNPC is to support all forms of innovations in the upstream, midstream and downstream.”
On the AKK pipeline and how NNPC plans to use locally-sourced pipes to build it, Baru stated: “I said engineering is part of it, so when you come to the procurement of the project, The main input in that project is the line pipes.”