The Minister of State for Petroleum Resources, Chief Timipre Sylva had disclosed that Covid-19 was one of the factors that contributed to NNPC reducing the costs of oil production in Nigeria. The Minister disclosed this while briefing newsmen on Tuesday evening in Abuja, according to the News Agency of Nigeria.
The Minister said, “We have reduced the cost of production successfully the issues of our local currency notwithstanding. “Recently, the Nigerian National Petroleum Corporation (NNPC) and the Department of Petroleum Resources (DPR) have launched programmes on cost reduction and it has impacted the sector.
“Both programmes have helped to bring down the cost of production, but what also helped us in reducing the cost of production is from a very unlikely quarter and that is COVID-19. With COVID-19, oil prices crashed and a lot of contracts were rationalised and we had to renegotiate, so, we were able at that point to get everybody on board to reduce the cost of production.”
He also added that “expatriates leaving Nigeria’s oil sector made locals to step in and of course, the locals are cheaper and we have to find local solutions to some of our problems.” The Minister said that Nigeria was able to significantly bring down the cost of production even beyond five per cent, even was still targeting a 10 per cent reduction of production cost.
“The average consumption has actually reduced from about 66 million to about 52 million on the average,’’ he added