Upgrade Your Capacity To Achieve Global Competitiveness, Kyari Tells Oil Companies

The Group Managing Director of the Nigerian National Petroleum Corporation, Mele Kyari has said there is need for indigenous companies operating in the nation’s oil and gas sector to upscale their capacity for global competitiveness in order to reduce the cost of oil production

He also said the nation’s education system has a great role to play in the development of highly skilled technical manpower, adding that any legislation on Nigerian content development that fails to embrace issues of investment in the educational system was not likely to achieve much.

Kyari said these during a virtual stakeholders consultative summit organized by the Senate Committee on Local Content.

The NNPC boss was represented by the Group General Manager, Corporate Planning and Strategy, Eyesan Oritsemeyiwa

With the negative impact of the Coronavirus pandemic on global economy which had led to an unprecedented decline in the global price of crude oil, cutting the cost of oil production by Nigerian oil companies had become imperative.

Based on official statistics, Nigeria is one of the oil producing countries that has the highest cost of oil production.

For instance, while it costs an average of $8.38 to produce a barrel of crude oil in Saudi Arabia, it costs Iran and Iraq about $9.08 and $10.57 respectively.

Currently, it costs Nigeria about $17 to produce a barrel of crude oil.

But Mele said that through capacity upgrade, oil companoes could be able to reduce the cost of oil production

He also commended the National Assembly on its plan to review and amend the Oil and Gas Local Content Act as well as extend the local content law beyond the oil and gas industry to other sectors of the nation’s economy to reflect current realities in the industry.

Kyari urged the committee to ensure that the plan is carried out in a timely manner in order for the law to deliver maximum value for the nation.

He said “We commend the legislators for the plan to extend the local content law beyond the oil and gas industry to other sectors of the nation’s economy, this would open up the non-oil sectors to growth and development.

“Also it will help to achieve the target of reducing the cost of oil production in Nigeria on a sustainable basis”.

He argued that there was need to have a legislation to resolve the issues of funding challenges faced by local players, adding that oil and gas business required high technical skills and competence to compete favourably at the global stage.

“In terms of the interaction between industry and education, we think these new bills would present a good model that we should work with.

“People are the greatest assets of any nation. If you have the best brains in the industry today, as long as you are not getting good replacement for them from the educational sector when they grow old and retire, then your industry will collapse,” the GMD said.

He explained that the nation has made some good progress from the era when there was no single indigenous operator in the oil and gas industry to the current situation where local operators have risen to double digits, stressing that the trend should be encouraged.