By Francis Ogwo
Nigeria is currently targeting a cut down of its Unit Operating Cost (UOC) of crude oil production per barrel at $10 by 2021 from its current rate of $17 per barrel.
This was made public by the Group Managing Director of Nigerian National Petroleum Corporation (NNPC), Mele Kyari, while stressing that Nigeria, Libya, and Venezuela are currently topping as the highest in the cost of producing crude oil at $17 per barrel, $23.80 per barrel, and $23.50 per barrel, respectively.
This, according to statistics, is a contrast from Saudi Arabia and Kuwait which are currently ranking as the lowest in total production cost at $9.9 per barrel and $8.50 per barrel, respectively.
Kyari, while speaking at a virtual conference with editors, expressed confidence that by 2021, the $10 per barrel target would take effect.
He said the UOC for the 2019 full year performance went above the target $10 per barrel in all cases and noted that performance for the first quarter of 2020 brought to the fore, the need to further optimize the cost as UOC figures were higher than the target of $10 per barrel in all cases.
It was further revealed by the Corporation’s helmsman that in the revised budget of 2020, some of the Production Sharing Contract (PSC) companies used figures indicative of UOC above $10 per barrel, while stating that Nigeria would adhere to the production cuts of the Organisation of Petroleum Exporting Countries (OPEC).
This was an indicator that the country should likely produce 1.142 million barrels per day in May and June, 1.495 million barrels between July and December and 1.579 million barrels per day between January 2021 and April 2022.
One special reason, according to Kyari, why the NNPC should crash crude oil production cost, is to sell out the prospect for Nigeria’s crude with a view to making the country a haven for foreign direct investment and also promised a repair of the nation’s refineries with optimal performance.
Kyari further revealed that a subsidiary of the NNPC, Integrated Data Services Limited, with its focus on seismic data acquisition, processing and storage, are operating independently without subvention.
Recall that non-OPEC members whose production costs are much higher than Nigeria’s are Brazil at nearly $49 per barrel, Canada at $41 per barrel and the United States at $36 per barrel.
