International Oil Companies (IOCs) and their indigenous counterparts may soon be forced to halt operation, as the cost of producing a barrel of crude oil remains high. The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, says there is no way the country can keep producing, while the prices of crude remain low.
The minister said that the oil sector has suffered infrastructural deficit of over $15 billion (N4.59 trillion) as many investment has been put on hold due to the low oil prices.
At an international conference and exhibition organised by the Society of Petroleum Engineers in Lagos, he said it is better for Nigeria to stop crude oil production than to produce at a high cost.
The minister said that government is compelled to work towards drastic reduction of cost of production because “there is no way this country will produce oil at this sort of swelling prices that we see; there will be no margins left for this country.”
He said unlike other countries that have managed to reduce their production cost over the years, the cost of producing crude oil in Nigeria has remained high.
Kachikwu said only companies that could drive down costs would be given favourable consideration in the oil sector.
Besides, the President of Dangote Group, Alhaji Aliko Dangote, has said that the country will be able to retain over $7.5 billion (N2.295 trillion) yearly through import substitution from the construction of the Dangote Refinery.
Dangote stated this during the visit of the Minister to the site of the refinery in Ibeju Lekki, Lagos.