NNPC to Collaborate With IOCs to Boost Oil Production

NNPC to Collaborate With IOCs to Boost Oil Production

The Nigerian National Petroleum Corporation (NNPC) has identified key areas of collaboration with the international oil companies (IOCs) in Nigeria to boost oil and gas production in the country.

The corporation said in a presentation at the ‘Industry Leaders Panel’ session of the just concluded 2017 edition of the Nigeria Oil and Gas (NOG) conference and exhibition in Abuja that the IOCs needed to continue to collaborate with it to achieve the common goals in the respective Joint Venture agreements they signed with it.

The presentation was made by the corporation’s Chief Operating Officer, Gas and Power, Saidu Mohammed, who represented the Group Managing Director of NNPC, Dr. Maikanti Baru at the panel discussion.

Baru, however, said while corporate and national ambitions might differ, the NNPC and IOCs could still collaborate to achieve their objectives.
He charged the IOCs to team up with the corporation to leverage their joint capacities in energising the country’s upstream production.

Baru listed the areas they could collaborate to include contractual model, technology, funding, production growth, capacity development, cost reduction, environmental protection, corporate social responsibility, security and reserve growth.
“Corporate ambitions and national aspirations are different. However, we can maximise mutual benefits through collaboration,” he added.

Listing the possible areas of collaboration, he stated: “Contractual model – lessons learnt in existing contractual models such as PSC be applied in improving future contractual relationship between the IOCs and NOC, technology – technological advances made in oil and gas can be extended to benefit other sectors of the economy, funding – collaboration required to finally exit JV cash calls where IOC used to borrow on behalf of the JVs to fund JV operations.”

On production growth, Baru said it would be critical for improving both project and country economics if IOCs collaborate with the NNPC to grow production and reduce cost of production.
He also stated that in partnering of capacity development, they could help develop the right human capacity that will guarantee posterity for the companies and Nigeria, adding that such collaboration could also help in cost reduction for exploratory opportunities.

He noted that lessons learnt and best practices garnered on how to reduce cost of production significantly could help the industry remain competitive, while environmental pollution in the form of gas flares and oil spills are issues where collaborations are needed for quick mitigation and response.

On corporate social responsibility, Baru stated that: “Collaboration will ensure corporate resources available are targeted towards the right social requirements. IOCs need to collaborate further to ensure implementation of initiatives of NAPIMS.”

He explained that collaborations on security would ensure that the right to play and operate for both the country and the company were secured, adding that IOCs would need to bring to bear lessons learnt from other operators to have safe operations and help grow the country’s reserves to guarantee her some level of energy security and improve the companies’ market value.

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