(Ecofin Agency) - The Nigerian National Petroleum Corporation (NNPC), has said that for the past one year, it has saved $2billion by renegotiating upstream servicing contracts as part of its quest to continually reduce the high cost of production in the industry.

“For the upstream, cost reduction and efficiency are key features that we will pay attention to,” Maikanti Baru (photo), the Group Managing Director of the state oil company disclosed in a statement on Tuesday. He said the company has also cut back operating costs for oil production from $27 per barrel to $22.

According to Baru, average production of oil and condensate on a daily-basis stood at about 1.88million barrels since the start of this year with Forcados and Qua iboe terminals back online after being shut down due to attacks, last year. This put Nigeria on track to surpass its 2017 target of producing 2.2million barrels of oil and condensate a day.

NNPC has been making efforts to revive the oil industry which the government relies on for roughly two-thirds of its revenue. Attacks on the facilities by militants last year weakened production thereby pushing the economy into its first recession in 25 years. However, since February, talks with community leaders in the northern oil hub to end the attacks have been fruitful, allowing oil production to recover.

Anita Fatunji