The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has rolled out measures to reduce the cost of crude oil production to less than $20 per barrel, The Nation learnt at the weekend.
According to a document entitled: “Outlook for the Upstream Oil and Gas Sector of the Nigerian Oil and Gas Industry for 2024 and the Near Term (2024-2026), which our Abuja correspondent obtained, the sub-optimal level of crude oil production in the country is between $25 and $40/ barrel.
The document, which the Commission’s Chief Executive, Gbenga Komolafe, authored, noted that NUPRC will set up a framework for crude oil and gas transportation.
The NUPRC boss said: “In accordance with the commercial regulation mandate of the Commission as enshrined in Section 4 of the Petroleum Industry Act (PIA), the Commission would, in 2024 and the near term, pursue strategies aimed at optimising the unit cost of production for oil and gas by driving the reduction of the current average unit cost of production in all terrains to below $20 per barrel, in the near term from current sub -optimal levels of $25-$40 pet barrel.”
To achieve the plan, the commission, said Komolafe, has not only set up a framework for oil and gas transportation and/or handling costs based on a standardised tariff template/model, it has also planned to implement an open access regime for upstream oil amd gas pipelines and ancillary facilities.
The document also noted that the commission has planned to incentivise investment in oil and gas infrastructure to boost domestic delivery and stimulate the deregulated domestic gas market through the ease of administrative approval processes.
NUPRC has also planned to operationalise the Host Community Development Trust Fund(s) development actions to engender social inclusion and commitment to protect oil and gas facilities and ensure uninterrupted operations, thereby eliminating cost-community agitations and disruptions.
The document reads in part: “Activate the Environmental Remediation Fund Administration Regulations 2023 (currently awaiting gazetting). The commission will diligently implement the regulations to address the environmental impacts of oil and gas operations during the period.
“Agree on a protocol with the Nigerian Content Development and Monitoring Board (NCDMB) to ensure the implementation of the Nigerian Content regime does not escalate costs.’
John Ofikhenua,
