NNPC Ltd, NCDMB Sign MoU With Oil Majors To Reduce Cost, Drive Efficiency In Nigeria’s Oil & Gas Industry

The Nigerian National Petroleum Company Limited and the Nigerian Content Development Monitoring Board on Monday signed a Memorandum of Understanding with Oil Majors to boost ease of doing business, reduce cost and drive efficiency in Nigeria ‘s oil and gas industry.

The NNPCL Vice President, Upstream, Oritsemeyiwa Eyesan, signed on behalf of the National Oil Company while the Executive Secretary NCDMB, Simbi Wabote signed on behalf of the Board.

The move is in line with one of the key mandates of NNPC Ltd as the National Energy Company in article 53 (7) of the Petroleum Industry Act (PIA) to conduct its affairs on a commercial basis in a profitable and efficient manner.

The mandate for efficiency requires that NNPC Ltd is committed to working with its partners in ensuring key processes, procedures, and timelines that drive major business activities such as contracting are structured in a manner that engenders efficiency and drives profitability.

As a demonstration of his resolve to the efficiency mandate in the Petroleum Industry Act, the GCEO of NNPC Ltd, Mallam Mele Kyari has taken the lead in constituting an industry joint committee (IJC) comprising NNPC Ltd, NCDMB, and IOCs in developing an industry framework for an optimized contracting cycle.

The MoU would enable the implementation of the industry framework which was developed by the IJC to achieve an optimal contracting cycle of not more than 180 working days.

Key benefits of the framework in the MoU include a reduction of the contracting cycle for open competitive tender, selective tender, and single sourcing tender to 180, 178, and 128 working days respectively compared with the current best effort performance of 327, 333, and 185 working days respectively.

The framework is in line with the Nigerian Upstream Cost Optimization Program (NUCOP) and in consonance with President Bola Tinubu’s directive for NNPC Ltd and NCDMB to engage the industry with the objective of improving the performance of the petroleum industry.

An optimized contracting cycle is expected to improve the ease of doing business, reduce cost, and drive efficiency which will eventually translate to production growth, increased revenues, and ultimately improved profitability.

The MOU is one of the many collaborative solutions between the major industry players that will contribute significantly to the double-digit economic growth rate agenda of the Government and generate tremendous value for all the stakeholders including the investors, the companies, the community, and the country at large.

Speaking at the MoU signing, the GCEO NNPC Ltd., Mr. Mele Kyari said signing the agreement heralds exciting times for the nation’s oil and gas industry and stands as a bold testimony that the Company is plunging into the future of hope, productivity and success.

Kyari, who was represented at the occasion by NNPC Ltd’s Executive Vice President, Upstream, Mrs. Oritsemeyiwa Eyesan, added that with oil and gas as the bedrock of Nigeria’s economy, there is the need to get the contracting process in the Industry right so as to get the economy back on track.

In his remarks, the Executive Secretary, NCDMB, Engr. Simbi Wabote, described the MoU signing as a way forward and a critical step towards enhancing the nation’s crude oil production.

In their various remarks, the IOCs, represented by the MDs/Country Chairs of Shell, ExxonMobil, Chevron, TotalEnergies and ENI all pledged their commitment and support towards the implementation of the MoU for the benefit of all parties.