NNPC secures $2bn from scale down upstream contracts

By Patrick Andrew Abuja

Th e Nigerian National Petroleum Corporation (NNPC) says it has secured $2 billion discounts from renegotiated upstream contracts being executed by its various service providers, in the last one year. Making this known yesterday, the NNPC Group Managing Director, Dr. Maikanti Baru, said the feat was achieved following consistent eff orts to drive down the high cost of production in the industry. T h e G M D s a i d i n a 25-minutes podcast that the NNPC had lowered operating costs of production from $27/ barrels to $22/barrels.

“For the Upstream, cost reduction and efficiency are key features that we will pay attention to”, Dr. Baru who took over from the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, on July 4 2016, said. D r. B a r u , w h o w a s delighted with the corporation’s performance, said there had been a signifi cant increase in crude oil reserves and production, stressing that the national average daily production rose 1.83million barrels of oil and condensate to average production at around 1.88million barrels. According to him, with the improvement in security and resumption of production operation on the Forcados Oil Terminal (FOT) and Qua Iboe Terminal (QIT) pipelines, the average national production would increase and surpass 2017 target of 2.2million barrels of oil and condensate per day.

“Th e Corporation had grown the production of the Nigerian Pe t ro l e u m De ve l o p m e n t Company, NPDC, NNPC’s flagship Upstream Company, from 15,000 barrels of oil per day (bopd) to the current peakoperated volume of 210,000bopd in June 2017,” he said. Further, he stated that the ownership of Oil Mining Licence, OML13 had been restored to NPDC following a presidential intervention, with fi rst oil from the well expected before the end of the year.

T h e G M D s a i d t h e confidence of the NNPC JV partners to pursue new projects had been rekindled following the repayment agreements for JV cash call arrears that were negotiated and executed for outstanding up to end 2015 by all the IOC Partners of the Corporation’s Joint Venture Companies (JVCs). Dr. Baru directed that focal points for effi ciency in each of the Corporation’s Autonomous Business Units, ABUs, and Corporate Services Units, CSUs, should be identifi ed to ensure the realization of the key performance indicators enshrined in the 2017 budget, adding that the Corporation must attain a six-month contracting cycle.

Leave a Reply