The Minister of State for Petroleum Resources and Chief Timipre Sylva revealed that Covid-19 was one of the factors that prompted NNPC to reduce the cost of oil production in Nigeria.
According to the Nigeria News Agency, the minister revealed this when briefing journalists in Abuja on Tuesday night.
What the minister said
The minister said, “Despite the local currency issue, we succeeded in reducing production costs.
“Recently, the Nigerian National Petroleum Corporation (NNPC) and the Ministry of Petroleum Resources (DPR) launched a cost reduction plan, which has had an impact on the industry
“Both projects have helped reduce production costs, but what also helped us reduce production costs is a very unlikely quarter, and that is COVID-19.
“Due to COVID-19, oil prices have plummeted, and many contracts have been rationalized. We had to renegotiate. Therefore, we were able to involve everyone in order to reduce production costs.”
He also added “Foreigners leaving Nigeria’s oil industry let the locals intervene. Of course, the locals are cheaper. We must find local solutions to solve some of our problems.”
The minister said that Nigeria can significantly reduce production costs, even more than 5%, and even still reduce production costs by 10%.
“Average consumption has actually decreased from an average of about 66 million to about 52 million,” He added