The Minister of State for Petroleum Resources Ibe Kachikwu has said that even if the price of crude drops to $20 per barrel, Nigeria will still make profit as the country is producing onshore crude for about $13 per barrel.
Minister of State for Petroleum, Ibe Kachikwu
He also said that he expects the price of crude to spike in the later half of the year as shale productionbegins to drop. “First half of the year not likely to see much of a difference, but the latter half of the year, I think we are going to see the impact of dwindling production out of shale,” he told Bloomberg in Davos, Switzerland.
“We would have taken in the Iranian impact. You’re going to see a natural decline of almost a million barrels by virtue of non-investment. I personally don’t think it would get into the $50s in 2016, in 2017 potentially. At the end of the day, the excess stock would have to get out. A lot of that excess stock is not necessarily OPEC stock. OPEC has 1.5 million barrels of that but a good 2million barrels of non-OPEC stock is still sitting out there.”
“Everybody is sort of coming back on land so this is time to put a lot of investments on ground, put a lot of incentives on ground, make everybody return on ground, where in fact our average cost of production is about $13 per barrel. “So we need more on that, bringing those numbers down from $13 to somewhere $10, obviously we won’t get the Saudi figures of about $6 or $7, but at least get it much lower.”
Source: The Cable