The Federal Government has restated that the reduction in the cost of crude oil extraction is of utmost importance and crucial to the enhancement and competitiveness of Nigeria’s oil and gas sector.
This was emphasized by the Honorable Minister of State, Petroleum Resources, Chief Timipre Sylva, in his address at the launch of the Nigerian Upstream Cost Optimization Program (NUCOP).
Speaking at the launch of the program which held at the NNPC Towers Abuja, on Tuesday, 9th February, 2021, the Minister informed that NUCOP was aimed at optimizing our Upstream Operatiing expenses through process enhancement and industry collaboration. He recalled that one of the components of the Top-9 priorities assigned to the Ministry of Petroleum Resources under the Next Level Agenda of Mr. President is the Reduction in Crude Oil Extraction Cost.
Speaking further, Sylva classified the major cost drivers identified as contributing to the high cost of crude oil production in Nigeria to include capital expenditure items, operational cost, systemic cost factors, cost associated with contracting procedures, and policy related elements among others.
The Minister informed that it was in line with President Mohammadu Buhari’s administration’s resolve to address these issues that Mr. President recently commissioned the National Oil and Gas Excellence Centre in Lagos.
Relatedly, Sylvia said an Industry Standing Committee charged with the mandate of monitoring compliance with cost reduction directives have been put in place. The committee drew membership from the Ministry of Petroleum Resources as the coordinating entity, NNPC, DPR, NCDMB, IPPG, OPTS and PETAN. He added that the Committee has made significant progress in finding short and medium-term solutions.
In attendance at the event were the Chairman Senate Committee on Upstream, Senator Albert, Chairman Senate Committee on Gas, Senator James Manager, GMD of NNPC, Mallam Mele Kolo Kyari, Executive Secretary of NCDMB, Engr. Simbi Warbote among others.
Deputy Director (Information)
Ministry of Petroleum Resources