Nigeria’s Minister of State for Petroleum Resources, Emmanuel Ibe Kachikwu, has stated that Nigeria will not be hopeless even if oil prices fall to $20 per barrel.
Lower outputs from Nigeria, Iraq and Saudi Arabia may have slashed the crude oil export of the Organisation of Petroleum Exporting Countries (OPEC) in December, even as the cartel’s daily basket of 13 grades fell to $22.9 a barrel recently.
However, Kachikwu said Nigeria would still make profit even if oil drops to $20 as cost of producing a barrel of crude oil has been put at an average of $13 per barrel onshore.
Nigeria had not “suffered too badly in terms of investments, as most of the projects we have are still on track,” Kachikwu said.
“The deep off-shore projects, obviously we are putting on hold, given the fact that the returns on those, would not match the prices today.”
“Everybody is sort of coming back on land so this is time to put a lot of investments on ground, put a lot of incentives on ground, make everybody return on ground, where in fact our average cost of production is about $13 per barrel.
“So we need more on that, bringing those numbers down from $13 to somewhere $10. Obviously we won’t get the Saudi figures of about $6 or $7, but we can get it much lower,” he said at the World Economic Forum in Davos, Switzerland.
