Dr. Ibe Kachikwu, the Minister of State for Petroleum Resources, has declared that the country will have to stop oil production if the cost of producing the commodity remains “blatantly” high.
The minister made this known on Monday while speaking at the opening ceremony of the Nigeria Annual International Conference and Exhibition organised by the Society of Petroleum Engineers in Lagos.
The Punch quoted him as saying that the country was being left behind by its peers who had dramatically reduced their costs of production.
He said: “When you look at the cost of production in Nigeria, it remains blatantly high. Our cost per barrel today is about $27 per barrel for JV (joint venture) fields. In Saudi Arabia, it is about $9. So we are way apart in terms of cost that anything that happens will hit us very hard.”
He said countries within the United Arab Emirates had cut costs very dramatically, describing them as the lowest-cost producers in the world.
He added: “Even though we have been singing over the last two years that we need to drive cost down, the current figure that I still have showing me the numbers of last year have not shown me a major dramatic reduction in the cost of production.”
“For me, you rather leave the oil in the ground than produce at a cost that doesn’t make sense. So, cost is going to be a very high driver. So that is certainly one area we are focusing on; we are working collaboratively with oil companies.
“But let’s make no mistake about it: If we cannot negotiate it down, we will compel it or we will stop the production; it does not make any sense.”