In a significant boost to the nation’s oil and gas sector, NNPC Ltd. and the Nigerian Content Development & Monitoring Board (NCDMB) have officially inked a Memorandum of Understanding (MoU) with International Oil Companies (IOCs) to streamline the contracting cycle, aiming to reduce it to no more than 180 working days.
In a press release issued by NNPC Ltd. management, the signing of this MoU, which took place at NNPC Towers in Abuja on Monday, underscores NNPC Ltd.’s dedication to fulfilling the efficiency mandate outlined in the Petroleum Industry Act (PIA). This mandate centers on establishing an industry framework for an optimized contracting cycle.
The optimized contracting cycle is anticipated to enhance the ease of conducting business, lower costs, and promote efficiency, ultimately leading to increased production, higher revenues, and improved profitability. Furthermore, the MoU is poised to make a substantial contribution to the Federal Government’s agenda for achieving double-digit economic growth rates and creating substantial value for all stakeholders, including investors, corporations, host communities, and the nation as a whole.
Key benefits outlined in the MoU framework include a reduction of the contracting cycle durations for open competitive tenders, selective tenders, and single-source tenders to 180, 178, and 128 working days, respectively. This marks a significant improvement compared to the current best effort performance of 327, 333, and 185 working days, respectively.
During the MoU signing ceremony, Mr. Mele Kyari, the Group Chief Executive Officer (GCEO) of NNPC Ltd., emphasized that this agreement heralds an exciting era for the nation’s oil and gas industry and underscores the company’s commitment to a future characterized by hope, productivity, and success. Kyari also stressed the pivotal role of the oil and gas sector in Nigeria’s economy, emphasizing the importance of streamlining the contracting process to set the economy back on a growth trajectory. Mrs. Oritsemeyiwa Eyesan, NNPC Ltd.’s Executive Vice President, Upstream, represented Mr. Kyari at the event.
In his remarks, Engr. Simbi Wabote, the Executive Secretary of NCDMB, described the MoU signing as a forward-looking and critical step toward enhancing the nation’s crude oil production.
Representatives of major IOCs, including Shell, ExxonMobil, Chevron, TotalEnergies, and ENI, expressed their commitment and support for the MoU’s implementation, emphasizing the mutual benefits for all parties involved.
This framework aligns with the Nigerian Upstream Cost Optimization Program (NUCOP) and adheres to the directive from the President for NNPC Ltd. and NCDMB to collaborate with the industry to enhance the petroleum sector’s performance. It also aligns with NNPC Ltd.’s key mandates under Article 53 (7) of the PIA, empowering it to operate profitably and efficiently as the National Energy Company.
The pursuit of efficiency mandates NNPC Ltd.’s commitment to collaborate with its partners to structure critical processes, procedures, and timelines, such as contracting, in a manner that fosters efficiency and drives profitability.
