The Nigerian National Petroleum Company Limited (NNPCL) and its partners — including international oil companies (IOCs) and independent producers — have launched a cost-optimisation plan aimed at saving about $3 billion in oil production expenses, with a target to increase the savings to $4.5 billion by December 2025.
Group Chief Executive Officer of NNPCL, Bayo Ojulari, disclosed the initiative on Thursday in Lagos while delivering a keynote address at the 50th anniversary of the Nigerian Association of Petroleum Explorationists (NAPE). Represented by NNPC’s Executive Vice President, Upstream, Udobong Ntia, Ojulari said the roadmap focuses on reducing both Unit Operating Costs (UOCs) and Unit Technical Costs (UTCs) across the sector.
“In the past three to six months, we have put up a roadmap to save about $3 billion, and by the end of December, we aim to increase that to $4.5 billion off our normal costs,” he said. “Driving down our cost per barrel is possible, and it’s gaining traction among industry leaders.”
For years, upstream operators have warned that Nigeria’s oil production costs — estimated between $20 and $40 per barrel — are among the highest globally, citing multiple taxes, levies, insecurity, and middlemen as key factors.
Ojulari said the push to cut costs is part of a broader drive to attract new investment, in line with President Bola Tinubu’s directive for the industry to secure $30 billion in fresh capital within two years and $60 billion by 2030.
Highlighting recent gains, he noted that crude output rose from about 1.4 million barrels per day (bpd) at the end of 2024 to 1.69 million bpd by June 2025, and briefly hit 1.8 million bpd in July. He attributed the increase to renewed investment, citing the $5 billion Bonga North project, expected to add 150,000 bpd.
Ojulari also revealed plans to work with industry leaders to encourage the return of major international oilfield service companies that have exited Nigeria.
Also speaking, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, announced that the country’s active rig count is projected to rise from 43 to 50 by the end of 2025, up from just eight in 2021.
“Nigeria has 210.54 trillion cubic feet of natural gas reserves and 37.28 billion barrels of crude oil reserves,” Komolafe said. “We currently produce 1.8 million barrels of oil per day and eight billion standard cubic feet of gas per day, with a national goal of three million barrels and 12 billion cubic feet daily.”
In his welcome address, NAPE President Johnbosco Uche urged the federal government to provide fiscal and regulatory incentives to support exploration, sustainable production, and reserve growth, calling for greater use of digital technologies such as artificial intelligence and machine learning.
