TheCable

The Nigerian National Petroleum Company (NNPC) Limited says it has signed a memorandum of understanding (MoU) with the Nigerian Content Development and Monitoring Board (NCDMB) and international oil companies (IOCs) to reduce the contracting cycle.

A contract cycle refers to the average time it takes to process a contract from start to finish.

In a statement on Monday, the NNPC said the deal was sealed to cut the contracting cycle to an optimal level of not more than 180 working days.

Executed in Abuja, the NNPC said the MoU was a demonstration of its commitment to the efficiency mandate as enshrined in the Petroleum Industry Act (PIA) — which is hinged on developing an industry framework for an optimised contracting cycle.

“An optimised contracting cycle is expected to improve the ease of doing business, reduce cost and drive efficiency which will eventually translate to production growth, increased revenues, and ultimately improved profitability,” the statement reads.

“The MoU is also expected to contribute significantly to the double-digit economic growth rate agenda of the Federal Government and generate tremendous value for all the stakeholders which include investors, companies, host communities and the nation at large.

“Key benefits of the framework in the MoU include a reduction of the contracting cycle for open competitive tender, selective tender, and single sourcing tender to 180, 178, and 128 working days respectively compared with the current best effort performance of 327, 333, and 185 working days respectively.”

‘THERE’S NEED TO GET CONTRACTING PROCESS RIGHT IN OIL, GAS INDUSTRY’

Speaking at the MoU signing, Mele Kyari, group chief executive (GCEO) of NNPC, said signing the agreement heralds exciting times for the nation’s oil and gas industry.

The agreement, Kyari said, also stands as a bold testimony that the company is plunging into the future of hope, productivity, and success.

Kyari, who was represented by Oritsemeyiwa Eyesan, NNPC’s executive vice-president, upstream, added that with oil and gas as the bedrock of Nigeria’s economy, there is a need to get the contracting process in the industry right so as to get the economy back on track.

In his remarks, Simbi Wabote, executive secretary, NCDMB, described the MoU 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 managing directors/country chairs of Shell, ExxonMobil, Chevron, TotalEnergies, and ENI pledged their commitment and support towards the implementation of the MoU for the benefit of all parties.

The framework, NNPC said, 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”.

NNPC said the development is also in line with its key mandates 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.