The NNPC said it is taking measures to bring down cost of crude oil production to 10 dollars per barrel or below.
The Corporation’s Chief Operating Officer (COO), Ventures and Business Development, Mr Roland Ewubare, said this on a TV interview programme.
He was merely restating a recent promise by the NNPC Group Managing Director, Malam Mele Kyari, that NNPC was working assiduously to bring down the cost of crude oil production to not more than 10 dollars per barrel by 2021.
Ewubare explained that terrain peculiarity was an important factor in determining cost.
He argued that pipeline vandalism and crude oil theft, among others, were some of the factors peculiar to the Nigeria terrain that increased crude oil production cost in the country.
He, however, stated that NNPC was looking very closely at such variable as logistics, security and transportation with a view to reducing cost of production to 10 dollars 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.
He added that the National Petroleum Investment Management Services (NAPIMS) achieved a six-month contracting cycle under him as Group General Manager.
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, he affirmed that Nigeria was in full compliance with the agreed output cuts.
Ewubare said that although Nigeria’s total production capacity was 2.3 million barrels per day (mbpd), it was currently producing only about 1.4 mbpd in compliance with the OPEC+ production quota.
He said that what made up the little extra over the 1.4 mbpd 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 2.3 mbpd. We are currently producing between 1.6 mbpd and 1.7mbpd.
“Our OPEC quota as a result of the cuts is about 1.4 mbpd. Condensate is not included in the computation of the cut numbers.
“So what we have is 1.4 mbpd of crude oil. The little you see above 1.4 mbpd is made up of condensate which does not count as part of the basis for assessing our OPEC quota,” he said.