Nigeria officially aims to decrease the barrel of oil production cost to fifteen dollars just after the National Petroleum Corporation of Nigeria (NNPC) announced that it had reduced the price to 23 dollars.
The deputy minister of Petroleum Resources, Ibe Kachikwu, reported that the oil production cost was at about thirty-two dollars per barrel, disagreeing with NNPC’s statement that it had been decreased to 23 dollars.
“The present situation in Nigeria is such that international direct assets flows into the country are at extremely high cost. For example, it is the rising oil production cost equaling 32 dollars per barrel,” explained Kachikwu.
The deputy minister added that all initiatives to decrease the crude oil production cost to 15 dollars were continuing. Moreover, cost drivers were known, and preliminary consultations with stakeholders were held. “The result of this initiative will undoubtedly be a win-win situation for both Nigeria and foreign investors,” concluded Ibe Kachikwu. However, he did not mention which strategies the Nigerian government would use to lessen the oil production cost.
International Oil Companies are currently afraid to invest in the Niger Delta for the reason that Boko Haram radicals often kidnap and kill foreign oil engineers. They say they will never risk people`s lives because of money.
Moreover, Nigerian government did not manage to formulate a countrywide strategy for encouraging its oil production. Alongside with this, the rate of corruption in the Nigerian oil industry is extremely high. As a result, many international contracts were canceled abruptly.
As NAIJ Nigeria informs, plenty of OPEC countries produce oil at a price below ten dollars per barrel. In this way, they limit the effect of unstable oil prices. Nigeria’s oil revenue, however, falls and rises according to the current oil cost.