In a significant move aimed at enhancing efficiency and reducing costs in the oil and gas sector, the Federal Government of Nigeria has entered into an agreement with industry operators to streamline the contracting cycle to a maximum of 180 working days.
The memorandum of understanding (MoU) was signed in Abuja by NNPC Limited, the Nigerian Content Development & Monitoring Board (NCDMB), and International Oil Companies (IOCs).
The agreement underscores the commitment of NNPC Limited to the efficiency mandate outlined in the Petroleum Industry Act (PIA). This mandate focuses on establishing an industry framework for optimizing the contracting cycle.
The optimized contracting cycle is expected to improve the ease of doing business, reduce costs, enhance efficiency, and ultimately lead to increased production, higher revenues, and improved profitability for all stakeholders, including investors, companies, host communities, and the nation as a whole.
Key highlights of the framework outlined in the MoU include a reduction of the contracting cycle duration for open competitive tenders, selective tenders, and single sourcing tenders to 180, 178, and 128 working days, respectively. This is compared to the current best-effort performance of 327, 333, and 185 working days for these respective tender types.
Mele Kyari, Group CEO of NNPC Limited, emphasized that this agreement marks an exciting moment for Nigeria’s oil and gas industry. It demonstrates the company’s commitment to a future of hope, productivity, and success. Kyari noted that the oil and gas sector is vital to Nigeria’s economy, and streamlining the contracting process is essential to restoring the country’s economic growth.
Engr. Simbi Wabote, the Executive Secretary of NCDMB, described the signing of the MoU as a significant step toward enhancing Nigeria’s crude oil production.
The IOCs, represented by the Managing Directors and Country Chairs of Shell, ExxonMobil, Chevron, TotalEnergies, and ENI, pledged their commitment and support for the implementation of the MoU. They recognized the mutual benefits that will result from this agreement for all parties involved.