May 26, 2024

NUPRC reveals plan to reduce $15, $25 upstream unit operating costs

Oredola Adeola

The Nigerian Upstream Regulatory Commission (NUPRC) has revealed the plan to drive down the Unit Operating Cost (UOC) of $15 per barrel (deep offshore) and $25 per barrel (onshore/shallow waters) of crude oil produced in Nigeria, with a view to increasing the country’s production output.

Engr Gbenga Komolafe, Chief Executive of the Nigerian Upstream Regulatory Commission (NUPRC), stated this in a recent statement obtained by EnergyDay.

According to him, Nigeria’s current UOC ranges from $15 (deep offshore) to $25 (onshore/shallow waters). He noted that the UOC is very high compared with the global oil price, adding that Nigeria, obviously, needs to improve its cost efficiency.

He said, “Our strategic thrust is to ensure that all our interventions as regulators translate into a significant reduction in the cost of doing business in the upstream petroleum industry.

“In addition to these measures, Section 8 of the petroleum act mandates the Commission to undertake the commercial regulation of the operations of the industry as well as develop cost studies and benchmarks for the evaluation of upstream petroleum operations.

Engr. Komolafe noted that the focus of the Commission is targeted on cost reduction as it relates to unit operating cost (UOC) stems from a comparative analysis of other jurisdictions.

This according to him would help Nigeria to determine the appropriate price of doing business in the upstream petroleum industry.

The NUPRC boss stated that the upstream operators would also be leveraging technology to drive down operating costs and increase the country’s production.

He however noted that the Commission will achieve its mandates by ensuring all its processes become fully automated and more transparent in line with the prescriptions of the Petroleum Industry Act(PIA).

Engr. Komolafe further requested for more collaborative working relationships and collaborative working relationships with the operators in the industry for value optimization.

Such collaborative aspirations, according to the NUPRC boss, would target unlocking the huge potential we have as a nation in the Deep Play prospects, Frontier Basins, and Deep Offshore environments.