The Nigerian National Petroleum Corporation (NNPC) has renegotiated its deep offshore rig rate from a staggering $580,000 to $164,000 per day, saving the country a 71.7 per cent cost of executing a similar operation in the past.
Similarly, the Corporation has achieved a 35 per cent downward review of rig rates per day for both swamp and land operations in its portfolios.
A rig rate is a major cost element incurred by an Exploration and Production (E&P) company in the course of drilling for oil or gas in deep offshore, shallow offshore, swamp, land areas or basins.
Speaking yesterday in Lagos at the 14th Annual Aret Adams Memorial Lecture, Dr Maikanti Baru, who was represented by the Chief Operating Officer, Gas & Power, Engr. Saidu Mohammed, said these reductions were also effected in NNPC’s Unit Technical Cost (UTC) over the period.
The Group Managing Director, Group Public Affairs Division, Mr. Ndu Ughamadu in a statement yesterday, explained that Baru declared that the various reductions serve as an incentive for investors to grow reserves, increase profitability and improve Return on Investment (ROI). He added that they also boost government revenue, thus improving government’s 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 at year end 2016. Indeed, NNPC is committed to further driving down the UTC”, Dr Baru stated in a lecture titled: Find More, Produce More at the one-day event.