Kachikwu: FG working to reduce cost of oil production to $15 per barrel

Minister of State for Petroleum, Dr Ibe Kachikwu
Minister of State for Petroleum, Dr Ibe Kachikwu

The Minister of Petroleum Resources, Dr Ibe Kachikwu, has decried the high cost of oil production at $32 per barrel, saying it makes the cost of Foreign Direct Investment very expensive.

Kachikwu made the assertion at the 2017 Annual Conference of the National Association of Energy Correspondents in Lagos.

The minister said that the Federal Government was making frantic efforts to bring down the cost to $15 per barrel in order to significantly bring down the cost of FDI.

“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.

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“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.

He said that the Petroleum Industry Governance Bill had been structured to fully turn around the petroleum sector and make it attractive to investors.

Kachikwu also said 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.

He regretted that after the Department of Petroleum Resources had issued about 40 licences, only two projects were currently being developed.

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The minister expressed optimism that the PIGB would bring about flexible fiscal regime, promote gas utilisation and enhance local content and as well restructure NNPC for enhanced productivity.