Dr. Ibe Kachikwu, announced that the NNPC might stop crude oil exploration, if prices fall across the globe.
NNPC might stop crude oil production
Indeed, it is estimated that a $50 oil price placed $150bn of upstream investments at risk. Companies are exposed to these dynamics and the resulting changes in oil prices to different degrees.
The Nigerian National Petroleum Corporation (NNPC) boss said “If the cost per unit barrel exceeds the price of oil, it will simply be left in the ground. We in Nigeria must also adjust to reflect current market realities.”
Kachikwu said this, while speaking at the 2015 pre-conference workshop of the Nigerian Association of Petroleum Explorationists.
He also said “It is worth mentioning that many oil projects today are of such scale and global scope that their cancellation affects the economies, not only of the producing countries, but also those of many others that provide the goods, services, and expertise necessary to deliver those projects.
“Indeed, it is estimated that a $50 oil price placed $150bn of upstream investments at risk. Companies are exposed to these dynamics and the resulting changes in oil prices to different degrees.
“By optimising our financial position, reshaping our portfolios, renegotiating costs – both capital expenditure and operating expenditure – limiting costs, reducing risks, reengineering business models and addressing fiscal terms, companies can weather a lower-price environment and position themselves for even greater success when prices rebound.”
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