Don't Miss


Home   >   Business   >   Industries   >   Energy   >   NNPC plans cost reduction in JV operations

NNPC plans cost reduction in JV operations

By on January 7, 2013

In a bid to ensuring that it continues to maintain value in the exploration and drilling operations in the Country, the Nigerian National Petroleum Corporation (NNPC) is set to review its level of engagement in the joint venture operations of vital oil and gas sector of the nation.

NNPC will be ensuring that as a major driver of the Joint Venture programme, it will pressurise other players to cut down their expenditure, by monitoring their operations in the Country.

Therefore, a New approach has been adopted by the NNPC towards ensuring uniformity in the drilling estimates and service costs embarked upon by the International Oil Corporations operating in Nigeria.

This is one of the innovations in the Corporation, that is championed by Mr Abiye Membere Executive Director, Exploration and Production(E&P) Directorate of the Nigerian National Petroleum Corporation. It is designed to address the issue of high cost of operations in the Oil and Gas Industry.

International Oil Corporations, or Multinational Oil Companies like Chevron, Exxon Mobil, Shell-BP, Agip and Total have been major operators in the Country’s Upstream sector for over 2 decades now.

The NNPC, is also seeking to reduce the process and manner tenders are handled and managed in the sector. It also plans to explore the utilization of the NiPex system which will reduce the huge cost incurred when contracts are extended beyond stipulated time of completion.

In the Joint Venture agreement and operations framework, the NNPC on behalf of the Nation, has about 60 percent equity, which gives it the weight and capacity to regulate exploration and production of activities in the country.

Also to ensure that the Operations in the Oil and Gas sector aligns with the International best practises, NNPC is taking seriously the evaluation and analysis of expenditures by International Oil Corporations in order to meet with the global benchmark.

To ensure that efficiency is sustained in the sector, the Exploration and Production Directorate is also exploring the possibility of developing synergy amongst the International Oil Corporations, to reduce the effect of projects duplication.