There are fresh indications that companies working in Nigeria’s petroleum industry can achieve $10 oil production cost.
This was the submission of the Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Mele Kyari, when he appeared on Arise Television.
He explained that the corporation was working with its partners to achieve the target.
He said that the industry has been embarking on cost sharing, including making use of one aircraft, “whereas in the past each company could deploy individual planes.
“The end result is that we have been able to substantially pull down cost although I can’t put a number to it. But I know that we have been able to bring down operating costs by at least 30 per cent, at least from what it used to be one year ago”, he stated.
He pointed that with current production cost NNPC was always comfortable when oil sells for between $50 and $60 per barrel.
On implication of rising oil price, he explained that getting back to pre-Covid level will be achieved by at least 2022, stressing that the oil industry was not comfortable with high oil prices because “customers will look for alternatives”.
The NNPC boss noted that the only way to pull down prices was to increase supply, adding that OPEC may intervene at their meeting.
He however pointed out that part of the problems with shutting down oil wells due to the OPEC cut was that it may be challenging getting it back to produce.
Kyari said that in the past, all the focus was on oil, pointing out that with renewed attention to gas as a transition fuel and plenty need for the product to power the country, gas will become the new oil.
He said the Ajaokuta -Kaduna-Kano (AKK) pipeline, OB3 and others will give more access to excess of two billion cubic feet of gas in the country.