The Nigerian National Petroleum Corporation (NNPC) Monday said its cost of producing a barrel of crude oil from Nigeria’s oil fields has further dropped to $20, adding that it was targeting to lower it further to $15 per barrel soon.

It also said it would ensure that all the pipes to be used in the construction of the 683-kilometre Ajaokuta-Abuja-Kaduna-Kano gas pipeline approved by the Federal Executive Council (FEC) are sourced from pipe mills in Nigeria, in adherence with the Nigerian Content Law.


Speaking at the ongoing technology and innovation expo organised by the Ministry of Science and Technology, the Group Managing Director of NNPC, Dr. Maikanti Baru, who was represented by NNPC’s Chief Operating Officer (COO), Gas and Power, Mr. Seidu Mohammed, explained that the corporation had been innovative in its operations, hence the drop in the production cost per barrel of oil.

“What NNPC will like Nigerians to know is the drive we are making to bring down costs. The more we bring down the production cost of oil and gas, the more money that comes eventually to the federal government and the pockets of the states and local governments. That is the kind of thing we are trying to do.

“We have been innovative in our work to bring down the cost. Many Nigerians don’t even know that we have started the local content drive. We have brought down the cost of producing a barrel of oil today to the neighbourhood of $20 and our target is to make sure we are at $15 and we continue to match forward.”
The NNPC had in August 2017, disclosed that it had driven down the cost of oil production from $78 per barrel to $23 per barrel, representing a 70.5 per cent drop in production cost.

Baru equally explained at the expo that the corporation would continue to work with agencies like the Nigerian Content Development Management Board (NCDMB) to ensure that the cost of production in the country’s oil and gas sector is competitive.
He said: “Engineering and technology are the bedrock of oil and gas, without that we may not have been where we are today. But then, what have we been doing at the NNPC? We have been trying to make sure that all the activities are domiciled in Nigeria.
“There was a time when even tender documents had to go to London for evaluation, but today, we have fully domesticated the engineering aspect of it.

“We have, in collaboration with the Nigerian Content Development Management Board, gone ahead to get Nigerians who are innovative and willing to invest in fabrication.
“In other words, what we want to do is to also domesticate the big chunk of where we spend the money, that is procurement, and we have gone far.

“Today, there are fabrications going on in areas of line pipes and valves. What we are doing in NNPC is to support all forms of innovations in the upstream, midstream and downstream.”
On the AKK pipeline and how NNPC plans to use locally-sourced pipes to build it, Baru stated: “I said engineering is part of it, so when you come to the procurement of the project, The main input in that project is the line pipes.
“And what we have done to drive the Nigerian content agenda is to make sure that until we fill the capacity of existing mills in Nigeria, we cannot import pipes.

“So, those who are coming in to build this pipeline will bear it in mind that at the end of the day, they may have to come in with their mills to manufacture the line pipes here.
“As for the other areas of services, Nigerians are there, and mostly Nigerians will construct the lines and do all the pre-commissioning and commissioning processes.”
He added that the rehabilitation programme for the NNPC refineries would also take into cognisance the requirement for local content in executing it.

According to the NNPC boss, “Upfront, we have already started training Nigerians that will eventually manage the place. But the whole process of revamping the refineries involves all the facets and Nigerians have to be there.
“Services will be provided by Nigerians and after revamping we expect a lot has to be done to ensure that the inputs to make it work will be provided by Nigerians.”

http://www.akelicious.com/2018/03/oil-production-cost-per-barrel-down-to.html

Very good news Mr Baru.

With the extensive supposed value engineering, why are Nigerians not feeling the effect, other than chants of stories of the other party's long years of misrule.

There is absolutely no strategic/success blueprint. Till then, related feedback is not useful!

Dem don chop this country die. How is it possible they were producing one barrel of oil for as much as $78 per barrel in the past?

Haba! And na some people go dey collect the differentials from this fraud oh.

They will now be flaunting the wealth up and down as if they got it from intellectual innovations.

Impressive.

How have we benefitted from the or to believe the "alledged" $20 production cost ? When we have a subsidy of N743m/day?

"Alledged" because I don't believe anything this govt says

A welcome development.

Does dat mean nigerian engineers are now involved?

More revenue to the nigerian pocket

what more can i say kwan
be happy, smile and laugh,
its a therapy we best know to work on our hardship. godbless

Let's see how this will affect the country positively

Let us see d impact on d citizens then. Talk is too much for dis regime.

ok

Total lie. Production cost can never be that high. 78$ For where? The most expensive cost in the world is the US Shale around 50$.

Nnpc and lies

Buhari is confused.
Kachukuw is confused.
Baru is confused.
Infact even Seun osewa is confused.

Untill fuel sells for N40 per litre, I will not believe APC story.

So next thing we should hear is that the cost per litre is down. Wake me up when that news breaks.

When a president is also the minister of petroleum. . They said we were the leaders of tomorrow but they refused to leave their sits.

Esseite:
How have we benefitted from the or to believe the "alledged" $20 production cost ? When we have a subsidy of N743m/day?

"Alledged" because I don't believe anything this govt says

...less the cost of production, we'll be making above $500 million dollars per day. Kindly note that this is a very conservative estimate.

Subsidy of $2m per day if strictly applied without fraud is 'affordable' to the country.

Although, at the end it still does not make an economic sense sha.

Esseite:
How have we benefitted from the or to believe the "alledged" $20 production cost ? When we have a subsidy of N743m/day?

"Alledged" because I don't believe anything this govt says

...less the cost of production, we'll be making above $500 million dollars per day. Kindly note that this is a very conservative estimate.

Subsidy of $2m per day if strictly applied without fraud is 'affordable' to the country.

Although, at the end it still does not make an economic sense sha.

Esseite:
How have we benefitted from the or to believe the "alledged" $20 production cost ? When we have a subsidy of N743m/day?

"Alledged" because I don't believe anything this govt says

But u believe the subsidy part and it is not alleged abi?

[s]

jamace:
Untill fuel sells for N40 per litre, I will not believe APC story.

san316:
So next thing we should hear is that the cost per litre is down. Wake me up when that news breaks.

[/s]

Wow, this kind comprehension challenge I never see, it has nothing to do with the cost of petrol.

Let that translate to better living for Nigerians. Good development though.

realborn:
Very good news Mr Baru.

With the extensive supposed value engineering, why are Nigerians not feeling the effect, other than chants of stories of the other party's long years of misrule.

There is absolutely no strategic/success blueprint. Till then, related feedback is not useful!

Very gud na, wey our debt don increase to 11 trillion under APC, within d space of just 3 years and 6 trillion under PDP within d space of 16 years. So which is beta.

usba:
[s][/s]

Wow, this kind comprehension challenge I never see, it has nothing to do with the cost of petrol.

There is no comprehension challenge. There is a link between cost of production and eventual cost of sales.

san316:


There is no comprehension challenge. There is a link between cost of production and eventual cost of sales.

Saudi Arabia has one of the lowest cost of production and it is the top producer of oil, still oil prices are not low. You cannot use your guguru and ekpa thinking when it comes to oil. The price of oil is determined largely by demand and supply not cost of production. What you are supposed to be talking about is increased Income for Nigeria not lower petrol prices which are determined by forces outside our borders

Good news

My questions
Will it reduce the price of fuel in Nigeria
Will it also reduce the price of goods in Nigeria

If the answers are NO, then there's nothing laudable in it

IMO

So??

bb

It used to be $28.99 before. Good news ( if true )

You may talk anything, talk is cheap, what evidence on ground to show that yu can get a barrel through drilling @ 20$ (7200 NGR) . You guys will just come and make noise acting like children all the time. Your qualification is questionable because the way you guys talk is pathetic and very comical!

san316:
But u believe the subsidy part and it is not alleged abi?

You and I know how long they denied it untill they could not hide it anymore.