The rising cost of operation is a major source of concern to stakeholders in the oil and gas industry, the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has said.
Kyari disclosed this at the 2021 Society of Petroleum Engineers Oloibiri Lecture Series and Energy Forum (SPEOLEF) in Abuja, on Thursday.
The NNPC GMD, in his keynote address at the event, said growth in the industry had escalated the operating cost drivers which included human resources logistics, security, and direct operational maintenance, among others.
Represented by the corporation’s Chief Operating Officer, Upstream, Mr Tombomieye Adokiye, the GMD said the cost drivers had become a major source of concern to stakeholders.
He said further that the global pandemic had affected crude oil production of demand and supply chain, adding that the long term effect touched on cost of production and thus a huge management risk for operators.
“In Nigeria, we are focusing on increasing domestic gas utilisation and maturing hydrocarbon reserves to generate revenue for the nation, although we are curtailed by the OPEC cuts,” he said.
Kyari also said NNPC seeks to increase market shares for more investments in petrochemicals and fertilizer, promote the use of Compressed Natural gas (CNG) and increase domestic refining capacity.