Abuja — The Nigerian National Petroleum Corporation, NNPC, Friday, blamed pipeline vandalism, crude oil theft, among others, for the high cost of crude oil production in Nigeria.
In a statement by the NNPC in Abuja, Chief Operating Officer, COO, Ventures and Business Development of the NNPC, Mr. Roland Ewubare, also noted that the NNPC was taking measures to bring down cost of crude oil production to $10 per barrel or below.
According to him, despite the incidence of theft and sabotage, the corporation was looking very closely at such variable as logistics, security and transportation with a view to bringing down the cost of crude oil production per barrel.
He stated that much had been done over the years in the area of reducing contracting cycle which used to be a major factor responsible for high cost of production, stressing that the National Petroleum Investment Management Services (NAPIMS) achieved a six-month contracting cycle under him as Group General Manager.
Furthermore, amidst speculations of non-compliance by some countries with the production cuts agreed upon by the Organization of the Petroleum Exporting Countries (OPEC) and its non-member allies, Mr. Ewubare affirmed that Nigeria was in full compliance with the agreed output cuts, saying reports including Nigeria on the list of non-compliant countries were not true.
Mr. Ewubare explained that though Nigeria’s total production capacity was 2.3million barrels per day (mbpd), it was currently producing only about 1.4mbpd in compliance with the OPEC+ production quota, stressing that what makes up the little extra over the 1.4mbpd figure being bandied around for Nigeria was condensate which is usually not computed as part of production in OPEC quota.
He said, “There is some confusion in the market around the parameters for the production cuts. Nigeria has a full production capacity of about 2.3mbpd. We are currently producing between 1.6 and 1.7mbpd. Our OPEC quota as a result of the cuts is about 1.4mbpd. You and I know that condensate is not included in the computation of the cut numbers. So what we have is 1.4mbpd of crude oil.
“The little you see above 1.4mbpd is made up of condensate which does not count as part of the basis for assessing our OPEC quota.”
Furthermore, the NNPC also alerted Nigerians to the existence of low grade and contaminated Automotive Gasoline Oil (AGO) otherwise called, diesel offered at discounted prices in some parts of the country.