The Nigerian National Petroleum Corporation, NNPC has announced a big cut on the cost of crude oil production from $78 per barrel in 2015 to $23 per barrel.

The Group General Manager of the National Petroleum Investment Management NAPIMS, a subsidiary of the NNPC, Mr. Dafe Sejebor said it represented 70.5% reduction in the cost of crude oil production in Nigeria.

He attributed the changes that led to production cost cut to the policies introduced by the NNPC that affected the upstream for both Production Sharing Contracts, PSCs and Joint Ventures, JV that led to saving of about $3billion.

“If you knock down your cost of production from $78 per barrel to $23, take the difference and multiply by the average daily production, you will discover that we are saving a minimum of $3billion in the upstream for both PSCs and JVs,” he stated.

Onshore and Offshore Production
The Group General Manager said that the target was to bring the cost of production to between $17 and $19 for onshore and offshore production if the Petroleum Industry Bill still before the National Assembly is enacted with all the components that protect the production of crude oil in Nigeria.

He commended the Nigerian Government for supporting the NNPC in tackling the challenges in the petroleum industry.

He said the cash call exit agreement signed in 2016 and the reduction of contracting circle from three years to six months had greatly impacted positively on the management of crude oil production.