(Ecofin Agency) - The Nigerian National Petroleum Company (NNPC) says it has reduced the cost of crude oil production per barrel to $23 against the $29 a barrel announced in July.

“The NNPC has driven down the cost of crude oil production from $78 dollars per barrel as at August 2015 to $23 per barrel representing a 70.5% reduction, saving the country over $3 billion annually,” Dafe Sejebor, Group General Manager of the head of the NNPC branch in charge of services and marketing said in a statement on Wednesday.

According to him, the company arrived at the decision after examining the difference between the old and new cost of production in relation to the present daily average production in the country.

“If you knock down your cost of production from $78 per barrel to $23, take the difference and multiply by the average daily production, you will discover that we are saving a minimum of $3 billion in the upstream for both Production Sharing Contracts, PSC, and Joint Ventures, JV,” he explained.

Sejebor added that the corporation’s current focus is to bring the cost of production to between $17 and $19 for onshore and offshore production respectively.

It should be recalled that three weeks ago the government approved a new petroleum policy which set production cost at $29, one of the highest levels in the world, according to Reuters.

Anita Fatunji