The draft Petroleum Policy for Nigeria has stated that “Nigeria is one of the highest cost of extraction oil provinces in the world, estimated at $29/bbl,“ according to Africa Oil & Gas Report.
“Nigeria has to substantially reduce the costs of production if the country is to be competitive in the modern low oil price world, and if it is to have anything more than a bare minimum government take,” the draft advises.
According to the document, Nigeria is only less expensive, as a cost per barrel producer, than Brazil and UK, in a 12 country ranking that includes Saudi Arabia, Iran, Iraq, Russia, Indonesia, Norway, US Non Shale, US Shale, Canada and Venezuela.
The cost ranking is pulled out of a U Cube analysis by Rystad Energy, the Norwegian consulting firm. The cost structure for Nigeria as follows: Gross taxes: $4.11, Capital Spending: $13.10; Production costs: $8.81 and Admin/transport costs: $2.97.