NNPC Secures $2Billion Discounts on Renegotiated Upstream Contracts

Posted On July 4th, 2017 - 11:59 am | by Oil and gas press

The Nigerian National Petroleum Corporation, NNPC, has secured $2billion discounts in the last one year from renegotiated Upstream contracts being executed by its various service providers.

The Corporation said the feat was achieved in the quest to continually drive down the high cost of production in the industry.

This was made known today by NNPC Group Managing Director, Dr. Maikanti Baru, in a podcast message to the Corporation’s Staff to mark One-Year Anniversary of his appointment as the Corporation’s helmsman.

Dr. Baru, who took over the mantle of leadership of NNPC from the Honourable Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, July 4 2016, said already 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 stated in the 25-minute podcast.

Dr. Baru directed that focal points for efficiency in each of the Corporation’s Autonomous Business Units, ABUs, and Corporate Services Units, CSUs, should be identified 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.

Speaking further on the achievement of NNPC in the past one year with him at the helms of affairs of the Corporation, Dr. Baru said there had been a significant increase in crude oil reserves and production, stressing that during the period, the national average daily production was 1.83million barrels of oil and condensate while currently, the Year-To-Date 2017 average production hovers around 1.88million barrels.

He said 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 was expected to increase and surpass 2017 target of 2.2million barrels of oil and condensate per day.

The GMD stated that in October last year, the Owowo Field, located close to the producing ExxonMobil-operated Usan Field was found, adding that the Field’s location could allow for early production through a tie-back to the Usan Floating Production Storage and Offloading (FPSO).

The Field, he noted, had added a current estimated reserves of 1billion barrels to the national crude oil reserves.

Dr. Baru noted that the Corporation had grown the production of the Nigerian Petroleum Development Company, NPDC, NNPC’s flagship Upstream Company, from 15,000 barrels of oil per day (bopd) to the current peak-operated volume of 210,000bopd in June 2017.

He stated that the ownership of Oil Mining Licence, OML13 had been restored to NPDC following a presidential intervention, with first oil from the well expected before the end of the year.

The GMD said the 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).

Source / More: NNPC

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