The Nigerian National Petroleum Corporation (NNPC) has announced that it is taking measures to bring down the cost of crude oil production to $10 per barrel or below.
The Chief Operating Officer (COO), Ventures and Business Development, Roland Ewubare, made the disclosure.
The Group General Manager, Group Public Affairs Division of the corporation, Kennie Obateru, stated that Ewubare spoke on Friday on a Channels TV programme, Business Morning.
Ewubare explained that terrain peculiarity was an important factor in determining cost.
He noted that issues such as pipeline vandalism and crude oil theft, among others, were some factors peculiar to the Nigerian terrain that drives up crude oil production cost in the country.
Ewubare said NNPC was looking very closely at such variable as logistics, security and transportation with a view to reducing cost of production to $10 and below per barrel.
He disclosed 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.
The official stressed that the National Petroleum Investment Management Services (NAPIMS) achieved a six-month contracting cycle under him as Group General Manager.
On 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, 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.
He 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.
Ewubare said that what makes up the little extra over the 1.4mbpd figure being bandied around for Nigeria was condensate and 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.