(Quick News Africa)- The Nigerian National Petroleum Corporation (NNPC) on Tuesday said it has secured transaction discounts worth $2 billion from renegotiated upstream contracts being executed by its various service providers in the last one year.
Maikanti Baru, who is the group managing director (GMD) of NNPC, stated this in a podcast message to the corporation’s staff to mark his one-year anniversary in office.
He said the feat was achieved in the quest to continually drive down the high cost of production in the nation’s oil and gas industry.
Baru, who took over the mantle of leadership of NNPC July 4 2016, said already NNPC had lowered operating costs of production from $27/barrel to $22/barrel.
“For the upstream, cost reduction and efficiency are key features that we will pay attention to”, the GMD stated in the 25-minute podcast, while adding that the corporation must attain a six-month contracting cycle.
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 1.83 million barrels of oil and condensate while currently, the year-to-date 2017 average production hovers around 1.88 million 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 the 2017 target of 2.2 million 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 1 billion barrels to the national crude oil reserves.
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 per day (bpd) to the current peak-operated volume of 210,000 bpd in June 2017.
He stated that the ownership of Oil Mining Licence (OML) 13 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).
