The Buhari Media Organisation (BMO) has described the 30% reduction in oil production cost in the country as yet another indication of the new lease of life in the Nigerian National Petroleum Corporation (NNPC) under President Muhammadu Buhari.
In a statement signed by its Chairman Niyi Akinsiju and Secretary Cassidy Madueke, the group said that it is part of the larger reforms that the Buhari administration has introduced into the oil and gas sector.
“We recall that when President Buhari pledged to reinvigorate NNPC, and by extension the oil sector on assuming office in 2015, many people thought that it would be a herculean task due to the opacity and rent-seeking antics that had over the years characterized the state-owned oil company’s operations.
“But he is gradually succeeding in instilling accountability and transparency in the sector through far-reaching reforms across the production value chain.
“It is against this backdrop that we hail the latest achievement of reducing the cost of producing a barrel of oil in the country by 30% through cost cutting measures with the ultimate goal of reducing it to as low as $10 a barrel in the nearest future.
“This is a country where the production cost has always been as high as $30 while it costs an average of $8.38 to produce a barrel of oil in Saudi Arabia and slightly over $10 in Iraq and Iran, but it got worse when Nigeria was virtually producing oil at a loss when it was selling crude as low as $10 a barrel at the height of the Covid-19 pandemic in 2020.
“Today, NNPC, on the watch of the Buhari administration, has succeeded in driving down the cost to between $18 and $20 a barrel with the collaboration of other exploration and production companies operating in Nigeria, by renegotiating existing contracts.
“What this means is that the margin of profit for the country and its partners from oil sales would now be higher than ever before.
“This clearly is not by chance. It owes a lot to the administration’s policy direction driven by President Buhari himself, as well as its determination to enthrone transparency and eliminate the opacity that NNPC had always been known for”, it added.
BMO noted that the corporation has in the last few years recorded a number of feats that were considered impossible before 2015.
“We can easily recall how the managers of the country’s oil sector in the Peoples Democratic Party (PDP) years had told Nigerians, quite arrogantly, that they will not understand details of NNPC’s financial record, if made public.
“But in 2019, under President Buhari’s watch, the state owned oil company released the first ever audited report, in its 44 years of existence, of its 20 subsidiaries and business divisions that also showed some positive results especially in its venture marketing subsidiary, National Petroleum Investment Management Services (NAPIMS) and the production arm, Nigerian Petroleum Development Company (NPDC).
“It has also embarked on the rehabilitation of Nigeria’s largest refinery with a view to ensuring that its production level is at least 80% capacity in the next 18 months.
“The administration has also successfully pushed through the Petroleum Industry Bill (PIB) in the National Assembly, a feat which previous PDP administrations woefully failed to achieve in 20 years”.
BMO is convinced that President Buhari would continue to drive reforms in the oil and gas sector, especially with the latest initiative on gas expansion targeted at exploiting Nigeria’s proven gas reserves of over 200 trillion cubic feet.