The Department of Petroleum Resources (DPR) has committed to collaborating with other agencies to achieve Federal Government’s targets on oil production and cost reduction. To the regulator, reduction of cost of oil production and meeting desired daily production and reserves figures will boost government’s revenues, EMEKA UGWUANYI reports.
Achieving Federal Government’s aspirations, of daily oil production of three million barrels, reserves growth from the current 37 billion barrels to 40 billion barrels by year 2020 and reduction of the production cost per barrel of oil, dominated discussions at the just held stakeholders’ meeting organised in Lagos by the Department of Petroleum Resources (DPR).
The DPR, also used the meeting to launch new upstream guidelines, which it said will promote efficiency, transparency and accountability in the petroleum sector.
Speaking at the Annual Rig & Vessel Stakeholders Regulatory Workshop, the Director of DPR, Sarki Auwalu, represented by Deputy Director and Head of Upstream Division, DPR, Enorense Amadasu, stated that the guidelines will guide operators on what is expected of them at every stage of their operations.
He said: “The essence of our meeting is to engage the industry and sensitise them on the programmes we have embarked upon for the past one year and also to seek more collaborations and for them to buy into our initiatives.
“The initiatives will promote efficiency in the industry, promote transparency and meet government’s aspirations by keying into its agenda on exploration, achieve the three million barrels per day (bpd) production target by year 2020 and to improve reserves to 40 billion barrels from 37 billion barrels as at today.”
He assured stakeholders that the agency has accurate data on what is produced daily all over the country. “We, as a regulatory agency, can account for every molecule produced in this country, at the wellhead, at the flow stations and at the terminal. We have all devices to monitor and account for every hydrocarbon produced in the country today.
“Next year, we will organise production accounting workshop with all stakeholders including Nigeria Extractive Industries Transparency Initiative (NEITI), Federal Inland Revenue Service (FIRS), Oil Producers Trade Section (OPTS), National Assembly and the media for all to understand how we account for every drop of oil produced and exported,” he said.
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In response to concerns raised by stakeholders on the possibility of multi-layer taxes in the upstream sector, Amadasu said royalty is statutory and it is first line charge. “The other costs people are talking about are the processing fee.
The new amendment they are concerned about is a token because these are amendments that have not been done in the past 20 years. Thus government is working with all stakeholders to ensure it is reviewed.
The cost is a minute aspect of the production cost we are talking about. It is less than 0.0001 per cent of the production cost. “That basically will not have much impact on the cost of production.
But when we talk of cost reduction, we are talking of how we can improve on reducing cost, benchmark our cost with other industry related costs in the Gulf of Guinea, our data acquisition cost and other big item costs.
“We have also been given a mandate as a regulatory agency to go out and work with sister agencies to reduce production cost by five per cent.
“In 2020, we will continue with government’s mandate to promote efficiency, accountability and transparency in the sector.
We will ensure we grow production from 2.2 million barrels per day to three million barrels per day and sustain constant engagement with all stakeholders in the sector,” he added.
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