Nigeria Targets $4.5bn Cost Savings in Oil and Gas Sector by December

Nigerian National Petroleum Company Limited (NNPC) has said the country’s oil and gas industry is on course to save between $3 billion and $4.5 billion in operational costs this year, while pursuing investment inflows of $30 billion by 2027 and $60 billion by 2030, in line with presidential directives.

NNPC said the industry has, over the past three to six months, cleared a roadmap to save about $3 billion from production costs, with the figure projected to rise to $4.5 billion by December.

Speaking at the 50th anniversary celebration of the Nigerian Association of Petroleum Explorationists (NAPE) yesterday in Lagos, the Group Chief Executive Officer, Bashir Bayo Ojulari, who was represented by the Executive Vice President, Upstream, Udobong Ntia, noted that the plan was the result of recent cost optimisation efforts and part of the company’s broader drive to make Nigeria’s oil more competitive.

“Oil in the ground doesn’t matter to anybody. It has to be extracted for the country to get the benefit”.

We are building the deals, infrastructure, and collaboration that will bring it out,” Ojulari said, adding that the NNPC was working with industry leaders to drive output growth across deepwater, shallow water, land, and swamp operations.Newspaper subscription bundles

According to him, Nigeria’s daily crude production has risen from 1.4 million barrels in December to over 1.8 million barrels in July, an increase of about 400,000 barrels in just six to seven months, attributing it to new projects and improved infrastructure reliability.

On future priorities, he identified deepwater reserves development, gas monetisation, facility renewal, AI-powered field optimisation, and innovative funding models as critical to sustaining production and attracting new capital.

Also speaking, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, said Nigeria’s upstream sector was operating under a globally competitive regulatory regime following the enactment of the Petroleum Industry Act (PIA) in 2021.

He highlighted the Commission’s 19 enabling regulations, competitive royalty regimes, zero hydrocarbon tax on certain projects, and a comprehensive regulatory action plan aimed at reversing the country’s decline in sub-Saharan Africa’s investment share from 44 per cent in 2014 to 30 per cent in 2022. Newspaper subscription bundles

Earlier in his welcome address, NAPE President, Johnbosco Uche, reflected on the association’s five-decade contribution to every chapter of Nigeria’s oil and gas story, from pioneering indigenous exploration and production companies to driving policy reforms.

He urged the government and the industry to work closely with geoscientists to unlock over 600 trillion cubic feet of yet-to-be-discovered gas, describing human capital as “our most precious reservoir”.