Mr Johnson Awoyomi, the Managing Director, National Engineering and Technical Company (NETCO), has attributed the Nigerian National Petroleum Corporation (NNPC) profitability to cost optimisation.

The News Agency of Nigeria (NAN) reports that NETCO is one of the subsidiaries of the NNPC.

Awoyomi spoke during an interactive session with young engineers at the Nigerian Association of Petroleum Explorationists (NAPE) 2021 Conference on Tuesday in Lagos.

He said that cost optimisation was the driving force behind the profitablity of the NNPC.

Awoyomi said the enactment of the Petroleum Industry Act ( PIA) was a game changer for the petroleum sector with the aim of enhancing commercial, profit and sustainability of the NNPC and its subsidiaries.

The NETCO boss said: “In 2020, when others were facing loses, NNPC was able to break a 44 year jinx by declaring a N287 billion profit.

“What the management of the NNPC did was to improve cost effectiveness by ensuring that operating cost was reduced while also improving profit accruing to the National Oil Company.

“These huge profits were made as a result of the NNPC’s top management deployment of cost optimisation initiatives.”

Awoyomi noted that cost optimisation was very key in the face of challenges facing the industry caused by the COVID-19 pandemic and global energy transition.

He said going forward, the NNPC was targeting to reduce the contracting cycle from 18 months to six months and was working to reduce the Unit Operating Cost of crude oil production to 10 dollars per barrel.

Awoyomi, therefore, urged the young engineers to imbibe the principles of cost engineering devoted to the management of project cost, involving such activities as estimating, cost control, cost forecasting, investment appraisal and risk analysis.