The Nigerian National Petroleum Corporation (NNPC) is taking measures to bring down the cost of crude oil production to $10 per barrel or below, the Corporation’s Chief Operating Officer (COO), Ventures and Business Development, Mr. Roland Ewubare, has said.
A press release on Friday by the Group General Manager, Group Public Affairs Division of the corporation, Dr. Kennie Obateru, said the NNPC COO explained that terrain peculiarity was an important factor in determining cost, arguing that issues such as pipeline vandalism and crude oil theft, among others, were some of the factors peculiar to the Nigeria terrain that drive up crude oil production cost in the country.
He, however, stated that NNPC was looking very closely at such variable as logistics, security and transportation to reduce the cost of production to $10 and below per barrel.
“Much had been done over the years in the area of reducing contracting cycle which used to be a major factor responsible for the high cost of production. The National Petroleum Investment Management Services (NAPIMS) achieved a six-month contracting cycle under me as Group General Manager,” he revealed.
Amidst speculations of non-compliance by some countries with the production cuts agreed upon by the Organisation of the Petroleum Exporting Countries (OPEC) and its non-member allies, Mr. Ewubare affirmed that Nigeria was in full compliance with the agreed output cuts, saying reports including Nigeria on the list of non-compliant countries were not true.
Mr. Ewubare explained that though Nigeria’s total production capacity was 2.3million barrels per day (mbpd), it was currently producing only about 1.4mbpd in compliance 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.
“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”, Ewubare clarified.
