(IOCs) International Oil Companies and its peers may soon have reason to halt operation, as the cost of producing a barrel of crude oil remains high.
According to The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, there is no way the country can keep producing, while the prices of crude remain low.
Kachikwu 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.
The 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.” said the minister.
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.
While other countries have managed to reduce their production cost over the years, the cost of producing crude oil in Nigeria has remained high, Dr Ibe pointed out.
Kachikwu said only companies that could drive down costs would be given favourable consideration in the oil sector.