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New strategy tailored to reduce oil production cost to $2 per barrel coming

Indication has started to emerge showing that Nigerian government has been working on the possibility of reducing aggregate cost of producing one barrel of oil to as low as $2.

This is coming on the heels of a new deal sealed by stakeholders in the oil and gas industry to evolve new strategies towards reducing the cost of oil production from $23 a barrel to $2 a barrel.

Analysts say the new idea will be driven by new range of technologies to be developed within the sector before the end of this year.

The position of the stakeholders was contained in a communiqué released by the Petroleum Technology Association of Nigeria (PETAN) at the just concluded Offshore Technology Conference (OTC) 2017, in Houston, Texas, USA.

A communiqué signed by Chairman of PETAN, Mr. Bank Anthony Okoroafor, revealed that the $2 per barrel oil production target would be achievable by working together through reduced logistics costs from $23 per barrel to $2 per barrel sharing vessels, security and management of assets.

The communiqué said in parts: “We can knock down cost by 40 per cent by adopting Brazilian model – standardise facilities, standardise 150,000 barrels Floating Production Storage and Offloading (FPSO) across all deepwater development instead of several capacities”.

It also noted that there was a need for infrastructure deficit map to show areas for investment, thereby creating a link on how best to replace 40 years old pipelines and build gas infrastructure.

PETAN also averred that “90 per cent of all projects need steel. There is a need to have one functional mill in the next five years. This will be the catalyst for building all facilities in-country. Lead contractors in every project must have solid infrastructure in-country.”

Reviewing the gains of the just concluded 2017 OTC, the communiqué added that “This year, our theme ‘Global Energy Dynamics: Challenges and Opportunities in the Nigerian Oil and Gas industry’, took a closer look at the oil and gas industry and how to fully optimise the inherent potential”.

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