The Nigerian National Petroleum Company Limited (NNPCL) and its partners including International Oil Companies (IOCs) and independent producers have unveiled a strategic roadmap to reduce the cost of oil production in the country, with an initial target to save $3 billion.
The savings, according to the Group Chief Executive Officer of NNPCL, Bayo Ojulari, are expected to increase to about $4.5 billion by December 2025.
Ojulari, represented by NNPC’s Executive Vice President, Upstream, Udobong Ntia, disclosed this in Lagos on Thursday while delivering the keynote address at the 50th anniversary celebration of the Nigerian Association of Petroleum Explorationists (NAPE).
“We’re taking another look at optimising our costs, driving costs down.
In the past three to six months, we have put up a roadmap to save about $3 billion, which I think by the end of December, we’re going to up that to about $4.5 billion, off our normal costs,” Ojulari said. “We will drive down our cost per barrel.
And I think it’s possible. It’s something that’s gaining traction among the industry leaders as well, because if they take down their costs, it helps them, it helps us as well. So a big focus of our cost management is everybody in the industry.”
High production costs estimated between $20 and $40 per barrel have long been a challenge for Nigeria’s upstream sector, driven by factors such as multiple taxes, security concerns, and middlemen.
Ojulari emphasised that investment remains a critical issue in the industry, pointing to President Bola Tinubu’s directive for the sector to secure $30 billion in new investments within two years and to scale up to $60 billion by 2030.
“All hands must be on deck. We’re playing in all the spaces. We’re ensuring from deep-water to the shallow waters, to land, to swamp, all areas of the business will see activity, and then we’ll be able to attain the targets we have here,” he said.
Meanwhile, Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, announced that the country’s active rig count is projected to rise to 50 by year-end.
He noted that Nigeria currently produces about 1.8 million barrels of oil and eight billion standard cubic feet of gas daily, with plans to raise output to three million barrels of oil and 12 billion cubic feet of gas per day.
With 210.54 trillion cubic feet of natural gas reserves and 37.28 billion barrels of crude oil, Komolafe said Nigeria holds the largest reserves in Africa, positioning the country for significant growth if production costs are reduced and investment inflows are maximised.
In his remarks, NAPE President, Johnbosco Uche, urged the government to provide fiscal and regulatory incentives that will enable the industry to explore, discover, and produce oil and gas efficiently.
“We must also return to the basics of exploration, quality data, bold ideas, and collaborative innovation.
We must go back to the un-appraised discoveries, unlock stranded value, and increase our reserve replacement,” Uche said. “We would then need to adopt digital transformation, machine learning, artificial intelligence, and apply them to our rich database for impactful results.
All these will drive our ambition of meeting the national 2030 production targets.”
