The Nigerian National Petroleum Corporation (NNPC) has listed conditions towards cutting cost of crude oil production.
In a statement made available at the weekend, the federal government agency said it is taking some steps to reduce the cost of crude oil production to $10 per barrel or even less.
The statement signed by the Group General Manager, Group Public Affairs Division, NNPC, Dr. Kennie Obateru, disclosed that the Chief Operating Officer (COO), Ventures and Business Development, Mr. Roland Ewubare, while on a TV breakfast programme, pointed out that the peculiarity of the terrain was an important factor in determining cost, with such issues as pipeline vandalism, crude oil theft, and some others being critical factors that are peculiar to the country’s terrain and would definitely drive up crude oil production cost in the country.
Ewubare noted that NNPC was looking very closely at such variables as logistics, security, and transportation with a view to bringing cost of production to $10 per barrel.
During the programme, he hinted 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.
He also explained that the National Petroleum Investment Management Services (NAPIMS) achieved a six-month contracting cycle under him, while he was the Group General Manager.
In the statement, Ewubare denied reports that Nigeria is one of the OPEC+ member nations that did not comply with the output cut that was agreed by the alliance.
He buttressed that though Nigeria’s total production capacity was 2.3 million barrels per day, it was currently producing only about 1.4 million barrels per day in order to comply with the OPEC+ production quota; stressing that what makes up the little extra over the 1.4mbpd figure being bandied around for Nigeria was condensate, which is usually not computed as part of production in OPEC quota.
According to Ewubare; “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”.
© 2020, https:. All rights reserved., Attribution and link to nigeriamaritime360.com is required if you wish to use any of the articles on this site