Market News

BY  Dare Olawin

The Federal Government, through the Nigerian National Petroleum Company Limited, says it is taking aggressive steps to save the oil and gas industry about $3bn to $4.5bn in operational costs this year. Group Chief Executive Officer of NNPCL, Bayo Ojulari, stated this in Lagos on Thursday in a keynote address at the Nigerian Association of Petroleum Explorationists’ 50th anniversary celebration.

Ojulari, who was represented by the company’s Executive Vice-President, Upstream, Udobong Ntia, said the company had already drawn up a roadmap that could push the cost savings target to $4.5bn by December 2025. He stressed that this cost optimisation drive is part of a wider national effort to attract $30bn in fresh industry investments over the next two years and $60bn by 2030, in line with a presidential directive.

“We’re taking another look at optimising our costs; we’re driving costs down. In the past three to six months, we have put up a roadmap to save about $3bn, which happens by the end of December, and we’re set to up that to about $4.5bn off our normal costs. We want to drive down our cost per barrel, per unit operating cost, and per unit technical cost. Let’s do the best we can to do more with less. I don’t think it’s impossible,” Ojulari said.

Ojulari disclosed that crude oil output has climbed steadily this year, rising from about 1.4 million barrels per day at the close of 2023 to over 1.8 million barrels per day by July 2025—a 400,000-barrel increase in just seven months. He credited this growth to industry-wide collaboration and major infrastructure improvements, including achieving 100 per cent operational availability of the Trans-Niger Pipeline for the first time in years.

“When we closed the year in December, I’d say we were at about 1.4 million barrels. By the end of June, we had rounded up the month with about 1.69 million barrels. And in the mid part of July, and towards the end of July as well, it was over 1.8 million barrels. That’s about 400,000 barrels of growth in just about six to seven months. Bonga North is coming with 150,000 barrels a day in production. The players in this room have increased production by 400,000 barrels. This is a lot of investment,” he stated.

Ojulari said much of Nigeria’s oil and gas infrastructure is ageing, calling for a deliberate programme of facility renewal and a better maintenance culture. “From an infrastructure standpoint, most of our infrastructure in the industry is all getting aged. I don’t like to say that, but I was told by my team, ‘We need to eradicate that old-aged infrastructure.’

“And how do we eradicate it? By making them new again. Facility renewal and maintenance opportunities are going on here and there. And as you bring up the opportunities, you are maintaining them. We don’t have a good maintenance culture in this part. We’re going to have to drive that with sustainable strategies around that. So we don’t go around with aged infrastructure and aged facilities,” he added.

He also called for a change in technology adoption, including artificial intelligence and real-time monitoring tools to optimise production and reduce downtime. “I want to see more AI in the industry. There’s just a lot of it going on as I do my business around the upstream companies.

“I want to see what we’re doing with technology. Digital twins, digital mirrors, AI, and SCADA systems. I can stay in my bedroom and monitor my production, know exactly what is going on, and you can make faster decisions than having to wait two or three weeks before you get an outcome of what’s going on deep into the swamps. How do we power AI in the wellheads, below the subsurface?

“How do we get real-time data to make changes and make adjustments as quickly as possible? Understanding the well dynamics, the fluid systems, and what the temperature is down there. Is it appropriate to run a well at that temperature? You can tweak your chokes based on what you’re seeing in real time. It’s going to be expensive to introduce, but as we go ahead, the cost will ease out. But those are the things we have to do,” Ojulari advised.

On funding, the NNPCL GCEO urged the industry to develop innovative financing models to complement traditional capital sources, stressing that investors expect clear margins and returns. “How do you attract funding? How do you gain the trust of the people bringing in the money? They don’t just bring in the money because they like you. It’s not in the social welfare programme. They want to make a margin from it. They want to make money. How do you give them that? So, funding is going to be a big piece. It has always been, but we need new sources. We need new areas,” he stressed.

Ojulari concluded by reaffirming NNPC’s readiness to partner with stakeholders to sustain growth, warning against a future where Nigeria looks back regretting missed opportunities. “NNPC is ready to collaborate. We don’t want to look back and say to ourselves, ‘We could have made these decisions. We could have jumped on this project. We could have done this and done that.’ We want to look back and say, ‘We did this, and it was a good decision,” he submitted.