Oil & Gas
FG Inaugurates Crude Oil Cost Optimisation Programme

The Federal Government has inaugurated the Nigerian Upstream Cost optimisation Programme (NUCOP) to drive down the cost of crude oil production in the country.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, at the inauguration on Tuesday in Abuja said that cost reduction of crude oil production would help Nigeria remain competitive in the global market.
“NUCOP is aimed at optimising our upstream operation expenses through process enhancement and industry collaboration.
“One of the top priority areas given to the Ministry of Petroleum Resources under the Next Level agenda of Mr President is the reduction of the price crude oil extraction cost.
“At the Ministry of Petroleum Resources retreat held in 2019, we identified some initiatives to tackle the challenging high cost of crude oil extraction in Nigeria,’’ Sylva said
He said that the major cost drivers identified as contributing to high crude oil production in Nigeria when compared with low production cost in other countries such as Iran and Saudi Arabia could be classified under five dimensions.
Sylva said that the five dimensions were capital expenditure items, operational cost, systemic cost factors, cost associated with contracting procedures and policy-related elements.
He explained that further diagnostic elements included lack of proper project definition, weak collaboration and standardisation, capacity and capability issues, security related issues, facility reliability and uptime limitations.
Others are financing and payment delays, single sourcing syndrome, high crude oil handling charges, high magnitude of crude oil loss , over-regulation, bureaucracy and multiplicity of tariffs, excessive expenses and bogus owners project management team cost.
“In line with the commitment of President Muhammadu Buhari’s administration to address these issues, he recently inaugurated the Oil and Gas Excellence Centre in Lagos.
“We have also put in place an industry standing committee to monitor compliance with cost production and tariffs, the committee will design template to collate unit technical and unit development cost of productions by operating companies and identify cost-efficient operators.
“They will institute a monitoring system with the Ministry of Petroleum Resource to track cost trends and track cost benchmark between Nigeria and other producing countries especially, those with production cost profile,’’ he said
Sylva added that the committee would design protocols for interface with operating companies to monitor their compliance to cost production directives.
He noted that the creation of industry cost efficiency aimed at unlocking cost optimisation opportunities and supplying efficiency for inventory management, logistics, security, among others.
He noted that complying with all these efforts would help to drive low cost of production in the country.
Sylva said that the average cost of a barrel of crude oil was currently below 30 dollars for the Joint Venture (JV) agreement and below 20 per barrel for the Production Sharing Contract (PSC).
“We need to do a heavy lifting not only to get to the optimal unit of cost but also to sustain it as part of our way of doing business.
“Today’s engagement with industry players is part of this administration’s effort to tackle this challenge, I expect robust discussions and realistic road mark to achieve cost optimisation objectives,’’ he said
In his remarks, the Group Managing Director, the Nigerian National Petroleum Corporation, Malam Mele Kyari, said that the country must cut down the cost of crude oil production for economic growth and development.
Kyari said that with the ongoing energy transition, consumers and investors have various choices to make across the world.
“We cannot produce 50 dollar oil and survive in the global market; you can do that in 2007, 2008 and survive, but today, it is impossible to operate with such cost and be competitive,” he said.
He said that for Nigeria to achieve reduction in cost, there was the need to have adequate security architecture, adding that conducive business environment remained important.
`In order to for us to remain competitive, to deliver our national objective of ensuring growth in our economy, we need to reduce crude oil production cost,’’ he said
Also, the Chief Operating Officer Upstream, Mr Adokiye Tombomieye, said that demand uncertainty and depressing oil price in the industry had called for every measure to ensure crude oil cost reduction.
“In view of the demand uncertainty and depressing prices, OPEC and its oil producing allies agreed on April 12, 2020 to cut production by 9.7million barrels per day, effective May 1, 2020 and taper to 7.7 million barrel per day from July 1 to Dec. 31, 2020 with further reduction to 5.8 million bpd from January 2021 through April 2022.
“The prevailing circumstances occasioned the need for the NNPC to cut down production cost for business continuity as crude oil at below cost, hence the GMD issued a directive for unit operating Cost to be reduced to 10 dollars,’’ he said.
He said that that human resources, logistics, security, direct lifting, operation maintenance and public affairs accounted for 80 per cent and 60 per cent of JV and PSC operating cost.
He noted that a road map for reduction of cost element would champion the nation’s resolve toward achieving an overall reduction of the unit operating cost.
Tombomieye said that there was the need for a wider industry engagement, adding that commitment would avail the NNPC the opportunity to cooperate with its partners in order to unveil NUCOP.
“This is with the sole objective of optimising upstream operation cost through process enhancement and collaboration within the industry.
“The successful implementation of this laudable initiative in 2021 and beyond will further support the `Executive Excellence’ drive to move from words to action,’’ he said (NAN)
NEWS
NGEP Urges Gas Reticulation In Buildings

By Olasunkanmi Onifade
Abuja, April 29, 2025 The National Gas Expansion Programme (NGEP) has called on stakeholders to promote the integration of gas reticulation systems in estates, districts, and industrial areas, following best practices seen in developed countries.
Chairman of NGEP, Prof.
Mohammed Ibrahim, made the call on Tuesday during the Builders’ Conference and Annual General Meeting of the Nigerian Institute of Building (NIOB), FCT Chapter, in Abuja.The conference, themed “Gas Reticulation in Building: Design, Safety, Environmental Compliance and Prospects for Builders,” focused on enhancing energy infrastructure in Nigeria’s built environment.
Ibrahim noted that with Nigeria’s vast natural gas reserves, gas reticulation offered a sustainable solution to improve energy accessibility, affordability, and reliability in homes and businesses.
“Gas reticulation in buildings presents a compelling pathway to a more sustainable, efficient, and resilient built environment.
“By prioritising sound design principles and ensuring strict adherence to safety and environmental standards, we can unlock the full potential of natural gas to drive progress,” he said.
He highlighted the key benefits of gas reticulation, including energy efficiency, cost effectiveness, versatility, and reliability.
Also speaking, the Chairman of the Council of Registered Builders of Nigeria, Samson Opaluwah, stressed the importance of capacity building for safe and efficient gas distribution.
He said this involved training engineers, technicians, and other professionals in system design, installation, and maintenance, while also strengthening regulatory frameworks and encouraging local innovation and manufacturing.
The Chairman of NIOB, FCT Chapter, Usman Okehi, emphasised the growing need to incorporate gas systems in residential, commercial, and industrial developments across Nigeria due to rising energy demands and gas availability.
According to him, with this advancement comes the need for strict adherence to design standards, rigorous safety protocols, and full environmental compliance.
“It is our responsibility as professionals and regulators to ensure these systems are functional, safe, and environmentally sound,” Okehi said.
He described the conference as a platform where stakeholders could explore the evolving landscape of gas infrastructure in building projects, share best practices, examine safety and environmental considerations, and assess future opportunities for builders in the sector.
The News Agency of Nigeria (NAN) reports that the Nigerian Institute of Building is the professional body for builders in Nigeria. It traces its origins to the Builders’ Society, established in London in 1834.
Oil & Gas
FG Inaugurates Committee to Enhance Gas Distribution in Urban Buildings

The Ministry of Petroleum Resources has inaugurated a Technical Working Group to enhance gas reticulation practices in Nigeria’s building industry.
The ministry’s Permanent Secretary, Amb. Nicholas Ella inaugurated the Technical Working Group (TWG) between the National Gas Expansion Programme (NGEP) and the Council of Registered Builders of Nigeria (CORBON) on Wednesday.
Reports= says that reticulation refers to the process of creating a network of pipes or tubes to distribute gas or other utilities to buildings or industrial sites.
The permanent secretary restated the importance of creating energy smart cities, saying that modern urban development relies on efficient gas and utility distribution systems,
“Most modern cities in developed countries have evolved to energy smart cities where energy, specifically gas and other utilities are piped to districts and estates.
“However, one of the key tools in creating energy smart city is the National Building
Code which, in essence, sets the guidelines on Building Pre-design, designs, construction and post-construction stages,” he said.
The permanent secretary reiterated the benefits of reticulated gas systems for households and businesses alike, adding that it ensured metered supply akin to water and electricity,
According to him, it eliminates the need for cumbersome refills, and also enhances safety by burying pipes and incorporating advanced safety equipments.
“The TWG is tasked with designing a comprehensive policy to implement best practices for gas reticulation using LPG, PNG, and Bio-Gas across Nigeria’s building sector.
“Key responsibilities include reviewing the current National Building Code, examining global gas distribution systems, and proposing quality standards for materials used in gas installations,” he said.
The permanent secretary emphasised the need for rigorous safety protocols and guidelines to ensure the efficient and safe use of gas in construction.
He urged the group to prioritise environmental sustainability in its recommendations, adding that the group is expected to submit its report by Nov. 15.
Earlier, Mr Samson Opaliwah, the Chairman of CORBON. expressed the council’s commitment to collaborate with the group to ensure safe uptake of gas for use in houses and housing estates in Nigeria.
“I assure you of the williness of CORBON to leverage the expertise and resources at her disposal to ensure that steps are put in place for gas infrastructure in buildings and estates.
“The gas infrastructure will be safe, sustainable and world-class.
” Our collective efforts will yield clear, standardised guidelines for safe and effective gas systems in buildings, matched with a skilled workforce to meet growing demands in Nigeria,” he said. (NAN)
Oil & Gas
Utilise Oil, Gas Industry Report as Tool for Public Debate – NEITI

The Nigeria Extractive Industries Transparency Initiative (NEITI) has urged stakeholders to utilise its 2022/2023 oil and gas report for civic engagement, constructive dialogue, and public debate.
Executive Secretary of NEITI, Dr Orji Ogbonnaya Orji, made the call at the report’s public presentation on Thursday in Abuja.
The report was unveiled by Mr Ola Olukoyede, Chairman, Economic and Financial Crimes Commission (EFCC), alongside Sen.
George Akume, Secretary to the Government of the Federation and Chairman, NSWG, NEITI and other dignitaries.Orji emphasised the report’s significance in guiding policy, encouraging public debate, and improving governance in natural resource management.
He highlighted the report’s comprehensive data on revenues, governance structures, operations, and compliance within the oil and gas sector.
Speaking at the public presentation of the report, Akume reaffirmed the Federal Government’s commitment to transparency principles.
Olukoyede pledged to investigate the report’s findings and recommendations, noting that NEITI’s previous reports led to the recovery of over N1 billion.
The report is available on NEITI’s website, providing valuable insights into the sector’s performance and challenges.
The presentation was attended by Chairmen of National Assembly Committees, captains of industries, members of diplomatic missions, development partners, civil society organisations and the media. (NAN)