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Ibe Kachikwu

FG to further crash oil production cost from $23 to $15 per barrel –Minister

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…Says only 2 out of 40 refinery licencees serious

Whereas stakeholders’ in Nigeria’s oil and gas sector have continued to have reservations on the authenticity of oil production statistics being churned out by officials of the ministry of petroleum from time to time, the Minister of Petroleum Resources, Dr Ibe Kachikwu, in Lagos on Thursday, again said government is working to reduce the cost of production on per barrel basis from $23 per barrel to about $15.

This is as the government is regretting that after the Department of Petroleum Resources (DPR), had issued about 40 licences, only two projects were currently being developed.

The two include Dangote Refinery Lagos and Orient Refinery Nsugbe, Anambra State

Kachukwu noted that the drive of the government is to further encourage Foreign Direct Investment (FDI), which he said had been very expensive.

Giving more insights at the 2017 Annual Conference of the National Association of Energy Correspondents in Lagos, he said recent reforms in the industry have among other things reduced the cost, “But we are targeting further reduction to at least $15”.

“In Nigeria today, the situation is such that FDI flows into the country are at high cost. An example is the high cost of production of oil at about $32 per barrel.

“Initiative to reduce the cost of crude oil production to $15 per barrel is ongoing. Initial consultations have been held with stakeholders and cost drivers have been identified. The outcome of this initiative will be a win-win for investors and the nation,” Kachikwu said.

While noting that the emerging Petroleum Industry Governance Bill (PIGB), which is waiting for presidential accent, had been structured to fully turn around the petroleum sector and make it attractive to investors, the minister disclosed that “the security issues and funding gap in the area of refinery had delayed the take off of refinery projects, even after licences have been issued”.


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