The Nigerian National Petroleum Company Limited (NNPCL) and the Nigerian Content Development & Monitoring Board (NCDMB) have signed a Memorandum of Understanding with the International Oil Companies (IOCs) to reduce contracting cycle to an optimal level of not more than 180 working days.
The MoU, was signed on Monday at the NNPC Towers in Abuja.
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It goes to demonstrate the national oil company’s commitment to the efficiency mandate as enshrined in the Petroleum Industry Act (PIA), which is hinged on developing an industry framework for an optimized contracting cycle.
The company noted that an optimised contracting cycle is also expected to reduce operational cost and drive efficiency, which will ultimately translate to production growth, increased revenues and improved profitability.
According to the NNPCL, 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.
Speaking at the MoU signing, the Group Chief Executive Officer (GCEO) NNPC Limited, Mr. Mele Kyari, said signing the agreement heralds exciting times for the nation’s oil and gas industry and stands as a bold testimony that the Company is plunging into the future of hope, productivity and success.
Kyari, who was represented at the occasion by NNPC Ltd’s Executive Vice President, Upstream, Mrs. Oritsemeyiwa Eyesan, added that with oil and gas as the bedrock of Nigeria’s economy, there is the need to get the contracting process in the Industry right so as to get the economy back on track.
In his remarks, the Executive Secretary, NCDMB, Mr Simbi Wabote, described the MoU signing as a way forward and a critical step towards enhancing the nation’s crude oil production.
In their goodwill messages, 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.