Nigeria Boasts Oil Production Cost of $23 Per Barrel
The average production cost for a barrel of oil in Nigeria has declined to just US$23 a barrel, Petroleum Minister Emmanuel Ibe Kachikwu told local media, adding that oil companies were not stopping there and were aiming to reduce this further, to US$15 a barrel.
Oil exports are the largest single source of oil revenues for the Nigerian state, and anything that makes these more appealing to buyers would help revenues grow. However, production costs are not the only factor at play when it comes to oil revenues.
Local communities continue to be a hotbed for militant activity as they see only a fraction of the money Nigeria receives for its oil exports. This, in turn, makes investors reluctant to commit more funds and other resources to field exploration and development in Nigeria.
As a result, Exxon, one of the companies with the longest presence in Nigeria, is now looking to sell assets there worth as much as US$3 billion.
The move is also in line with the company’s—and the whole oil industry’s—new focus on quicker and higher return projects, which, for Exxon are clearly not in Nigeria. Kachikwu has denied the claim that Exxon is looking to bail.