The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has set its sights on increasing oil production and reducing production costs as part of its 2024–2026 action plan. With the aim of ramping up oil production from 1.8 million barrels per day (bbl/d) to 2.6 million bbl/d by 2026, the NUPRC is implementing a series of strategic initiatives to achieve these goals.
One of the key strategies outlined by the NUPRC involves directing the development of oil assets to areas less prone to theft and vandalism. This includes issuing a new round of licenses for oil exploration and production in regions with lower security risks. Additionally, the commission plans to provide regulatory support for alternative crude oil evacuation routes, aiming to mitigate the impact of theft and vandalism on oil production.
In a bid to reduce the cost of oil production, the NUPRC is implementing measures to streamline operational expenses for oil firms. Currently, the cost of oil production in Nigeria ranges from $25 to $40 per barrel, making it one of the highest in the world. To address this issue, the NUPRC will provide incentives to oil producers and establish a framework for standardized tariffs for crude oil and gas transportation and handling costs. Furthermore, the commission plans to implement an open access regime for upstream oil and gas pipelines and ancillary facilities, ensuring fair and transparent access for all stakeholders.
Another significant aspect of the NUPRC’s action plan is the reduction of high signature bonuses paid by oil exploration companies to secure exploration blocks. By lowering these fees, the commission aims to attract more investment in Nigeria’s oil and gas sector, fostering growth and development in the industry.
While the NUPRC’s ambitious targets may face challenges, such as security risks and operational complexities, stakeholders are optimistic about the potential benefits of the commission’s action plan. By increasing oil production and reducing production costs, Nigeria stands to bolster its revenue from the oil and gas sector, contributing to economic growth and stability in the country.
This article highlights the NUPRC’s strategic initiatives to boost oil production and reduce production costs in Nigeria’s oil and gas sector, emphasizing the potential impact on revenue generation and economic growth.
