The Nigerian National Petroleum Company Limited (NNPCL) and the Nigerian Content Development Monitoring Board have signed a Memorandum of Understanding with major oil companies to reduce cost, drive efficiency in Nigeria’s oil and gas industry.
The agreement, which was signed on Monday, 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.
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.
NNPC 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.
