Emmanuel Ibe Kachikwu, Nigeria’s Petroleum Minister, has told local media that the average production cost for oil in the country has declined to just $23 per barrel. He also mentioned that oil companies were currently engaged in dropping costs further to just $15 per barrel.
Nigeria is heavily dependent on oil production for revenue, so lower production costs will help boost revenue, which could be especially important in periods of depressed oil prices.
ExxonMobil, the oil major supplying Mobil distributors, has long had a presence in Nigeria, but the company is now looking to divest some $3bn of assets in the African country in line with its recent focus on projects that can deliver quick returns. Kachikwu denied reports that ExxonMobil was planning to abandon the country. Militant activity in the oil fields often makes oil companies more reluctant to invest the sums necessary to explore and develop a field, yet French-based Total began production this year at the Egina offshore field, which may ultimately produce up to 150,000 barrels per day (bpd) of oil.
Kachikwu also said that despite the country being underdeveloped:
“…we are close to achieving the 4 million production target as we deliver 1.9 to 2 million barrels a day currently, but even at that why are we not taking over from the International Oil Companies, or produce a single oil firm that can transcend other West African countries.”
Nigeria is currently limited to a quota of 1.9 million bpd as part of its participation in the OPEC-led production deal.