Connect with us
nairametrics

Business News

Oil Firms risk a shut-down if they don’t reduce production cost

Published

on

Ibe Kachikwu, APPO, Energy projects in Africa

Oil producing companies in Nigeria have been enjoined by the Federal Government to either reduce their cost of production or leave the crude oil in the ground.

This is coming as the government is determined to increase its daily crude oil output and reserves to four million and forty billion barrels, respectively. Unfortunately, the high cost of extracting crude oil in Nigeria, which is one of the highest in the world, has hampered this effort.

Nigeria’s Minister of State for Petroleum Resources, Ibe Kachikwu, made this known while speaking at a symposium organised by the Nigeria Extractive Industries Transparency Initiative in Abuja. According to him, oil producers in the country should take advantage of the newly signed Petroleum Industry Governance Bill (PIGB), as one of the benefits of said bill is its ability to reduce the cost of extracting crude oil.

The bill will also address the issue of cost. Nigeria operates one of the highest costs of extraction among oil provinces in the world. It is clear and clearer that we either produce the oil at a good cost, or we leave it in the ground

Ibe Kachukwu, who was represented by one of his Senior Technical Advisers John Awoyemi, further stressed that it has become imperative for Nigerian oil companies to drastically reduce their cost of production, especially if Nigeria is to compete favourably in the current global oil price order. He also enjoined them to take maximum advantage of their sector by generating as much revenue from oil and gas as possible.

Kachukwu also praised the PIGB bill for the considerable reassurance it has given stakeholders in the industry since its passage.

GTBank 728 x 90

About the PIGB bill

The Petroleum Industry Governance Bill is aimed at providing the Governance and Institutional Framework necessary for the Petroleum Industry to operate. In the same vein, it also “seeks to incorporate the reforms proposed under the Petroleum Industry Bill. It addresses the reforms to the institutional framework of the petroleum industry. Some of these key reforms include-

  • The establishment of an independent regulatory commission, and
  • The unbounding of the NNPC into two limited liability companies.

Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs. He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor. Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan. If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

Click to comment

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Energy

NNPC says local operators must improve capacity to achieve low cost of oil production

The NNPC has mandated local oil companies to improve capacity to so as to reduce oil production cost.

Published

on

NNPC unveils covid-19 contacts tracing app, marketers to buy petroleum products online

The Nigerian National Petroleum Corporation (NNPC) has said that indigenous companies operating in Nigeria’s oil and gas sector must upscale their capacity for global competitiveness in order to achieve the target of reducing the cost of oil production in Nigeria on a sustainable basis.

This was disclosed by the Group Managing Director of NNPC, Mallam Mele Kyari, at a virtual stakeholder’s consultative summit which was organized by the Senate Committee on Local Content.

According to a press release by NNPC, which was signed by its Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru, the NNPC GMD said that there was need to amend the Local Content Act to reflect current realities in the industry.

Kyari, who was represented by the Group General Manager, Corporate Planning & Strategy (CP&S), Mrs Eyesan Oritsemeyiwa, argued that there was a need to have a legislation to resolve the issues of funding challenges faced by local players, stressing that oil and gas business required high technical skills and competence to compete favourably at the global stage.

Speaking further on the need for greater capacity building on the part of indigenous companies, the GMD said the nation’s education system has a great role to play in the development of highly skilled technical manpower, adding that any legislation on Nigerian content development that fails to embrace issues of investment in the educational system was not likely to achieve much.

GTBank 728 x 90

He said, “In terms of the interaction between industry and education, we think these new bills would present a good model that we should work with. People are the greatest assets of any nation. If you have the best brains in the industry today, as long as you are not getting a good replacement for them from the educational sector when they grow old and retire, then your industry will collapse,”

The NNPC boss pointed out that the nation has made some good progress from the era when there was no single indigenous operator in the oil and gas industry to the current situation where local operators have risen to double digits, stressing that the trend should be encouraged.

He praised the National Assembly’s initiative to review and amend the Local Content Act and urged the committee to ensure that it is carried out in a timely fashion in order for the law to deliver maximum value for the nation.

GTBank 728 x 90

The GMD commended the legislators for the plan to extend the local content law beyond the oil and gas industry to other sectors of the nation’s economy, stressing that it would open up the non-oil sectors to growth and development.

The local content initiative has been identified as being very critical to the development of Nigeria’s oil and gas sector as the Federal Government plans to reduce the cost of production of crude oil to $10 per barrel in the face of the recent crash in crude oil prices.

The Federal Government has provided the sum of $350 million as the Nigerian Content Intervention Fund to help support local participation in the oil and gas sector.

Continue Reading

Energy

NNPC signs gas development and commercialization deal with SEEPCO

NNPC and SEEPCO have signed a gas development and commercialization deal.

Published

on

FG to give up majority stakes in its 4 refineries, to be privately managed, NNPC, Pipeline Vandalism: Stakeholder collaboration, critical to tame menace - Kyari, Nigeria explains when it will fully comply with OPEC+ output cut

The state oil giant, Nigerian National Petroleum Corporation (NNPC) has signed a gas development deal with Sterling Exploration and Energy Production Company (SEEPCO).

The agreement between the 2 oil firm is for the development and commercialization of gas from Oil Mining Lease (OML) 143 that could help reduce gas flaring in the country.

The disclosure was contained in a press statement that was issued by the Group General Manager, Group Public Affairs Division of NNPC, Dr Kennie Obateru, on Saturday, September 26, 2020, in Abuja.

According to the statement, the Group Managing Director of NNPC, Malam Mele Kyari, while speaking at the agreement-signing ceremony which held at the NNPC Towers, described the execution of the deal as a great milestone as well as a testament to NNPC’s commitment to facilitating the nation’s transformation into a gas-powered economy.

Kyari disclosed that the deal would not only help reduce gas flaring and its environmental hazards but would also promote gas production and utilization in the domestic market.

GTBank 728 x 90

The NNPC boss also commended SEEPCO for its unwavering commitment to gas development and commercialization in the country which has led to the establishment of a Special Purpose Vehicle that will help expand gas utilization in the country as a cleaner, cheaper and more reliable alternative form of energy.

On his part, the Chairman of SEEPCO, Mr Tony Chukwueke, described the deal as an essential partnership that would help the company fulfil the pledge it made to support the efforts of the Nigerian government to eliminate gas flaring by monetizing it.

He commended NNPC and the Group Managing Director for ensuring the execution of the agreement which he described central to the achievement of the company’s cardinal objective of boosting the production of Liquefied Petroleum Gas (LPG), condensate and dry gas for the Nigerian market, adding that the company has invested about $600 million for that purpose.

GTBank 728 x 90

This is coming at a time when the Federal Government is shifting focus to gas utilization as an alternative source of energy especially with the increase in the retail pump price of petrol. This is one of the various initiatives by the government as represented by the NNPC towards providing alternative sources of energy.

Continue Reading

Energy

Buhari reappoints 3 Chief Executives of agencies under Federal Ministry of Petroleum

3 Chief Executive Officers of agencies under the Federal Ministry of Petroleum Resources have been reappointed.

Published

on

BREAKING: President Buhari retains portfolio as Petroleum Minister

President Muhammadu Buhari has renewed the appointment of 3 Chief Executive Officers of parastatals under the Federal Ministry of Petroleum Resources with immediate effect.

The appointments that were renewed by the president include that of Dr Bello Aliyu Gusau as the Executive Secretary of Petroleum Technology Development Fund (PTDF), Ahmed Bobboi as the Executive Secretary/Chief Executive Officer of Petroleum Equalization Fund (PEF) and Simbi Wabote as Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB).

The disclosure was made through a series of tweet posts by the presidency on its official Twitter handle on Friday, September 25, 2020.

The statement disclosed that the renewal of the appointments followed recommendations to the President by the Minister of State Petroleum Resources, Timipre Syla.

It stated that Dr Aliyu Gusau was credited to have run the PTDF successfully in the past four years, keeping faith with the Seven Strategic Priorities he had introduced in January 2017.

GTBank 728 x 90

These are Domestication, Cost cutting, Sustainable funding, Efficient internal processes, Linkages with the industry, Utilization of centres of excellence, and Pursuit of home-grown research.

It also stated that Bobboi got his reappointment for having run PEF in a way that made it a key and strategic player in the administration’s oil and gas reforms, especially in stabilizing the supply and distribution of petroleum products across the country, among others.

Going further, it stated that the NCDMB boss, Wabote, won his pips for managing the NCDMB and completing its headquarters building. Wabote was also credited to have initiated many landmark projects that were widely commended by industry players.

GTBank 728 x 90

Continue Reading
Advertisement
Advertisement
Advertisement
ikeja electric
Advertisement
Patricia
Advertisement
FCMB ads
Advertisement
Advertisement
IZIKJON
Advertisement
Fidelity ads
Advertisement
first bank
Advertisement
bitad
Advertisement
deals book
Advertisement
financial calculator
Advertisement
deals book
Advertisement
app
Advertisement