To cut down on the contracting cycle to boost productivity and growth of the nation’s oil and gas industry, the NNPC Ltd and the Nigerian Content Development & Monitoring Board (NCDMB) have signed a Memorandum of Understanding with the International Oil Companies (IOCs) operating in the country.
The MoU executed on Monday in Abuja aims at cutting down the contracting cycle in the industry to an optimal level of not more than 180 working days.
The pact is a demonstration of NNPCL and NCDMB commitment to their mandate to promote efficiency as enshrined in the Petroleum Industry Act (PIA) hinged on developing an industry framework for an optimised contracting cycle.
An optimised contracting cycle expected to improve the ease of doing business, reduce cost and drive efficiency would translate to production growth, increased revenues, and ultimately improved profitability.
Also, the MoU is expected to contribute significantly to the double-digit economic growth rate agenda of the Federal Government and generate tremendous value for all the stakeholders, including investors, companies, host communities and the nation at large.
The framework in the MoU would ensure the reduction of the contracting cycle for open competitive, selective and single sourcing tenders to 180, 178, and 128 working days respectively,
The current average best effort performance for the three categories of contracts are 327, 333, and 185 working days respectively.
Speaking at the MoU signing, the Group Chief Executive Officer (GCEO) of NNPCL, Mele Kyari, said signing the agreement would herald exciting times for the nation’s oil and gas industry.
He said the pact was a bold testimony that the Company was moving into the future of hope, productivity and success in its operations.
Kyari, who was represented at by NNPCL’s Executive Vice President, Upstream, Oritsemeyiwa Eyesan, said with oil and gas as the bedrock of Nigeria’s economy, there was the need to get the contracting process in the industry right so as to get the economy back on track.
The Executive Secretary, NCDMB,q Simbi Wabote, described the MoU signing as a way forward and a critical step towards enhancing the nation’s crude oil production.
In their various remarks, the IOCs, represented by the MDs/Country Chairs of Shell, ExxonMobil, Chevron, TotalEnergies and ENI all pledged their commitment and support towards the implementation of the MoU for the benefit of all parties.
The framework is in line with the Nigerian Upstream Cost Optimization Program (NUCOP) and in consonance with Mr. President’s directive for NNPC Ltd. and NCDMB to engage the industry with the objective of improving the performance of the petroleum industry.
The development is also in line with the key mandates of NNPC Ltd under the PIA’s Article 53 (7) which empowers it to operate as a commercial entity in a profitable and efficient manner, as the National Energy Company.
The mandate for efficiency requires that NNPCL 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.