The Group Managing Director of state-run Nigerian National Petroleum Corporation (NNPC), Mele Kyari, has warned oil firms operating in the country against cost of production above $10 per barrel.
In a webinar with Nigerian oil industry stakeholders later on Wednesday, Kyari said that Nigeria aimed to cap production costs at $10 a barrel by 2021 in order to remain competitive.
He said: “If you can’t do this, you walk away, this is not a business of subsidies.”
He said most of the oil companies have overbloated management structures in Nigeria that impact on the cost of production.
Kyari said that an oil price estimate of $27 per barrel for Nigeria’s revised budget could be on the low side as prices are recovering from two-decade lows.
“There’s a hope and expectation that with all the rebalancing that’s going on we could reach $42-$45 before the end of the year, which could compensate for the low prices in March and April,” he said.