Nigeria needs to achieve a unit operating cost of $10 per barrel to be able to maximise more revenue from oil, Group General Manager of the National Petroleum Investment Management Service, Bala Wunti, has stated.
He said the competitive nature of the global oil market had made it more compelling for Nigeria to reduce its oil production costs.
Wunti while speaking at the National Association of Petroluem Exploration 2020 conference which was held virtually noted that achieving a lower cost of oil production is not a luxury, but a necessity if Nigeria’s oil industry must survive.
He said based on forecast, global upstream investment is expected to drop by 26 per cent or $140bn year on year by end of 2020, adding that the development is making large oil and gas companies to cut down expenditure.
For instance, Wunti said that Royal Dutch Shell had launched ‘project reshape’ to slash up to 40 per cent cost of production in the wake of covid-19, adding that Exxon Mobil had followed similar pattern by cutting jobs by 15 per cent.
While stating that Chevron may eliminate about 15 per cent of workforce, he noted that the development is not limited to the international oil companies as it is also affecting the national oil companies.
He added: “So across the globe, everybody is trying to manage its costs in such a way that that you can continue to be profitable.”
He said in Nigeria Unit Operating Cost hovers between $18 in 2014 to $14 in 2017
