The steep drop in crude oil prices have put most Nigerian oil companies at risk, with industry experts saying oilfield shutdowns and job losses are imminent.
The Group Managing Director of the Nigerian National Petroleum Corporation, Mallam Mele Kyari, last month, put the cost of crude oil production in the country within the range of $15 to $17 per barrel.
The global oil benchmark, Brent crude, fell on Wednesday to as low as $15.98 per barrel, its lowest since June 1999, before rising to $20.87 per barrel as of 6.45pm Nigerian time.
“There is so much oil floating around in tankers that people can pick and choose, and ask for all sorts of discounts. This has serious repercussions for a country like Nigeria. Unfortunately for us, we are in a very nasty situation,” an energy expert and former board member of the NNPC, Alhaji Abdullahi Bukar, said.
Bukar also said some companies might shut the more expensive fields and leave the ones producing at “reasonably low-operating costs” to continue production.
The Chief Executive Officer of International Energy Services Limited, Dr Diran Fawibe, said the security cost and other charges imposed on operators had made the production cost in the country very high.
“So, in order to sustain that production level, the price must be high enough. We may see quite a number of projects being suspended, if not outright cancelled, until the price has gone up to a level where they can justify the economies,” he said.
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