Stakeholders move to crash oil production cost to $2 per barrel

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…Target 40% reduction

By Adewale Sanyaolu

Stakeholders in the oil and gas industry have agreed to evolve new strategies towards reducing the cost of oil production from $23 a barrel to $2 a barrel.

The position of the stakeholders was contained in a communiqué released by the Petroleum Technology Association of Nigeria (PETAN) at the just concluded Oil Technology Conference (OTC) 2017, in Houston, Texas, USA.  

The communiqué signed by Chairman of PETAN, Mr. Bank Anthony Okoroafor, maintained that the $2 per barrel oil production target would be achievable by working together through reduced logistics costs from $23 per barrel to $2 per barrel sharing vessels, security and management of assets.

‘‘We can knock down cost by 40 per cent by adopting Brazilian model – standardise facilities, standardise 150,000 barrels Floating Production Storage and Offloading (FPSO) across all deepwater development instead of several capacities,” the communiqué said. The communiqué noted that there was a need for infrastructure deficit map to show areas for investment, thereby creating a link on how best to replace 40 years old pipelines and build gas infrastructure.

‘‘90 per cent of all projects need steel. There is a need to have one functional mill in the next five years. This will be the catalyst for building all facilities in-country. Lead contractors in every project must have solid infrastructure in-country.’’

On the 2017 OTC, the communiqué stated: “This year, our theme ‘Global Energy Dynamics: Challenges and Opportunities in the Nigerian Oil and Gas industry’, took a closer look at the oil and gas industry and how to fully optimise the inherent potential.

It is noteworthy that more than 60,000 attendees and 2,400 companies/exhibitors from around the world gathered at the annual conference, placing 2017’s OTC among the top 10 highest attended in its 49-year history.

Also, more than 100 PETAN companies and 2,000 Nigerians attended the highly successful conference. As it has always been since the 1969 inception of OTC, attendees got crucial exposure to new technologies and global developments in the energy industry.

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