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Nigeria produced oil at $27/b in 2016 – NNPC

By on February 25, 2017

The cost incurred to produce a barrel of crude oil in Nigeria has declined to $27 per barrel as at year end 2016, from more than $70 per barrel in 2014.

The Nigerian National Petroleum Corporation (NNPC) made the disclosure in a tweet yesterday quoting its Group Managing Director (GMD) Dr. Maikanti Baru’s speech at the 14th Annual Aret Adams Memorial Lecture in Lagos.

Baru, who was represented by the corporation’s Chief Operating Officer (COO) Gas and Power, Engr. Saidu Mohammed, spoke on the theme: “Find More, Produce More.”  The GMD said since coming on board in 2016, the NNPC under him, has recorded a significant reduction in the cost of oil and gas production.

“I am proud to announce that our Unit Technical Cost (UTC) has significantly dropped from above $70 p/b in 2014 to about $27 p/b as at year end 2016,” he said.

He said that with reduced cost of production, government’s share of economic revenue will improve which means reduced budget deficit.

Daily Trust reports that despite recording significant drop in the cost of producing a barrel of crude, Nigeria remains the third most expensive country to produce oil in the world.

According to a recent Wall Street Journal’s (WJS) survey of 12 notable oil producers, the country stands behind the United Kingdom (UK) and Brazil who produce a barrel of oil at $44.33 and $34.99 respectively.  However, Minister of State for Petroleum Resources, Dr. Ibe Kachikwu had last year said his tenure will work hard to reduce the cost of crude production below $18 per barrel

Mohammed said NNPC  renegotiated its deep offshore rig-rate from a staggering $580,000 to $164,000 per day, saving the country a 71.7 per cent cost of executing a similar operation in the past.

Besides, the corporation has achieved a 35 per cent downward review of rig rates per day for both swamp and land operations in its portfolios.

 

[DailyTrust]

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