Okechukwu Nnodim, Abuja

The Nigerian National Petroleum Corporation has renegotiated its deep offshore rig-rate from $580,000 to $164,000 per day, saving the country 71.7 per cent of the cost of executing a similar operation in the past.
The corporation also stated that it had achieved 35 per cent downward review of rig-rates per day for both swamp and land operations.
A rig-rate is a major cost element incurred by an exploration and production company in the course of drilling for oil or gas in deep offshore, shallow offshore, swamp, land areas or basins.
The corporation’s Group Managing Director, Dr. Maikanti Baru, who spoke through the Chief Operating Officer, Gas and Power, Mr. Saidu Mohammed, at an event in Lagos, said the reductions were also effected in the NNPC’s unit technical cost.
Baru, in a statement issued by the national oil firm in Abuja on Thursday, said the various reductions served as an incentive for investors to grow reserves, increase profitability and improve returns on investment.
The reductions, he said, would also boost government revenue, thus improving its commitment to developmental projects across the country.
“I am proud to announce that our UTC has significantly dropped from above $70 per barrel in 2014, to about $27 per barrel as of year-end 2016. Indeed, the NNPC is committed to further driving down the UTC,” Baru stated.
The GMD said although the increased oil production involved the cost factor and the commodity price, the corporation had produced oil within the year with much efficiency.
“Price may not be readily under our control, but we need to manage the cost of production within the industry. Within the period we took over the reign of leadership in the corporation, we have been able to drive down cost to a very commendable level,” he added.
He explained that to achieve the 40 billion barrels of crude oil reserves and production of four million barrels per day as targeted by the government by the year 2020, the country needed an increase of at least one billion barrels in reserves year-on-year till 2020.
The GMD said the country should also produce half a million barrels incrementally on a daily basis within the same timeframe if it must achieve the desired 40 billion barrels crude oil production target by 2020.
He said, “Considering our quest for revenue generation as a nation, it is a given that we need to increase our exploration efforts in order to sustain our reserve base and grow production.
Baru charged industry stakeholders to invest in exploration activities, especially now that crude oil price is low.