NNPC, international oil companies, and local producers are collaborating to cut costs and save $3bn.
Nigerian National Petroleum Company Limited (NNPCL) and its partners, the International Oil Companies (IOCs) as well as independent producers, have put up a roadmap to drive down the cost of oil production in the country and save about $3 billion in the first instance.
The partners also said they aimed to increase the production cost savings to about $4.5 billion by December 2025.
Group Chief Executive Officer (GCEO) of NNPCL, Bayo Ojulari, made the disclosure in Lagos on Thursday, while delivering a keynote address at the 50th anniversary ceremony of Nigerian Association of Petroleum Explorationists (NAPE).
That was as Chief Executive Officer of Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr. Gbenga Komolafe, announced that active rig count in the country’s oil and gas sector would rise further to 50 rigs by the end of this year.
Represented by NNPC’s Executive Vice President, Upstream, Udobong Ntia, Ojulari stressed the need for the operators to optimise both Unit Operating Costs (UOCs) and Unit Technical Costs (UTCs) by doing more with funds available to them.
In his paper, titled, “Nigeria’s Oil and Gas Industry: History, Current Realities, Future Opportunities and Strategies for Sustainable Resource Development,” the GCEO stated, “We’re taking another look at optimising our costs, driving costs down. In the past three to six months, we have put up a roadmap to save about $3 billion, which I think by the end of December, we’re going to up that to about $4.5 billion, off our normal costs.
“We will drive down our cost per barrel. And I think it’s possible. It’s something that’s gaining traction among the industry leaders as well, because if they take down their costs, it helps them, it helps us as well. So a big focus of our cost management is everybody in the industry.”
For decades, upstream operators in the Nigerian oil and gas industry have been complaining about the high cost of oil production, which some say is between $20 and $40 per barrel. They have attributed this to a lot of factors, including multiple taxes and levies, security issues, and the influence of middlemen.
Ojulari said the industry stakeholders were currently talking about investments as a critical issue in the sector, especially with the presidential directive that mandated the industry to look into bringing in fresh investments of about $30 billion by the next two years.
He reiterated that President Bola Tinubu had mandated NNPCL and the industry to raise investment in the oil and gas sector to $60 billion by 2030, saying that is a lot of investment.
Ojulari said the task meant that the stakeholders in the oil sector had to refine and mature the opportunities to attract the investments that will bring the mandate to fruition.
According to him, “All hands must be on deck. We’re playing in all the spaces. We’re ensuring from deep-water to the shallow waters, to land, to swamp, all areas of the business will see activity, and then we’ll be able to attain the targets we have here.”
Highlighting some progress recorded in the industry recently, Ojulari said between 2024 and year-to-date 2025, there had been an uptick in terms of production, powered by the contributions of the players.
He said Nigeria closed last year with about 1.4 million barrels per day oil production. By the end of June 2025, he pointed out, production rose to about 1.69 million barrels per day.
Ojulari maintained that in the early part of July and towards the end of July, oil production further climbed in just a few days to about 1.8 million barrels, attributing the growth to the return of investment in the industry.
He stated, “That’s about 400,000 barrels’ growth in just about six to seven months. Let me put this in context. Bonga North has just signed a Final Investment Decision (FID) at the end of last year, of about $5 billion.
“And they are going to be coming with 150,000 barrels a day in production. The players in this room have increased production of 400,000 barrels. That’s a lot of investments.
“That’s a lot of work being done in a six-month timeframe. And not just the oil companies, the contracting community as well. We often leave them out, but they do a great job to support the kind of venture that happens here.”
In response to the exit of international service companies from Nigeria, which affected the country adversely, the NNPCL boss said the company would be engaging some industry leaders on how to bring back the foreign service firms.
Ojulari stated, “In the next few weeks or so, we’ll be meeting with some industry leaders to agree on what the framework will look like for a return of a big construction company back into the space because we’re expecting a lot of things to happen. So that framework is going to be set, and I’m really looking forward to the discussions around that.”
Equally speaking at the event, the guest speaker, Komolafe, who bagged NAPE’s award, announced that active rig count in the country’s oil and gas sector would rise to 50 rigs by the end of December this year.
Komolafe spoke on the topic, “Evolution of Oil and Gas Regulation in Nigeria: Opportunities, Achievements and Regulatory Strategies for Upstream Resource Optimisation.”
He stated, “Our oil and gas sector has seen a significant surge in investment. New investors, empowered by clarity and quality, have entered our sector, oil and gas reserves and production have increased, while rig counts have surged from eight in 2021 to 43 currently, with projections to reach 50 by the end of the year.
“This momentum reflects a bold new chapter; one driven by ambition, resilience, and opportunity.”
Assuring the stakeholders of more transformative opportunities in the petroleum sector, the NUPRC chief executive said with 210.54 trillion cubic feet of natural gas reserves, the largest in Africa, and 37.28 billion barrels of crude oil reserves, Nigeria held enormous reserves.
According to him, as the largest oil producer in Africa, Nigeria currently produces approximately 1.8 million barrels of oil per day and eight billion standard cubic feet of gas per day.
Komolafe stated that the national aspiration was to increase production to three million barrels of oil and 12 billion standard cubic feet of gas per day.
In his welcome address, President of NAPE, Mr. Johnbosco Uche, observed that Nigeria had appraised near field exploration oil growth opportunities that needed to be evaluated, developed and produced in a sustainable manner.
Uche called on the federal government to work closely with the industry by providing the fiscal and regulatory incentives that will enable industry players to explore, discover, and produce oil and gas efficiently.
He stated, “We must also return to the basics of exploration, quality data, bold ideas, and collaborative innovation. We must go back to the un-appraised discoveries, unlock stranded value, and increase our reserve replacement.
“We would then need to adopt digital transformation, machine learning, artificial intelligence, and apply them to our rich database for impactful results. All these will drive our ambition of meeting the national 2030 production targets.”
