Buhari Seeks Lower Oil Production Costs

President Muhammadu Buhari has sought lower oil production cost.

Gatekeepers News reports that President Muhammadu Buhari has called on the operators of Nigeria’s oil and gas industry to search for more efficient ways of exploiting the commodity to reduce the cost of production per barrel.

Buhari noted that although Nigeria is observing the trend in the global movement toward renewables, he is optimistic that oil would remain relevant in the coming years.

Buhari said this at the fourth edition of the Nigeria International Petroleum Summit (NIPS) in Abuja, FCT.

The president, represented by the Minister of State for Petroleum, Mr. Timipre Sylva, stated that his administration has demonstrated commitment to the overhauling of the oil and gas industry to make it fit for the future.

The president said the accelerated and unprecedented oil demand disruption and the supply glut that generated the crisis in the global economy had presented both challenges and opportunities.

While calling for stringent measures to reduce production cost, Buhari stated that if strategies are not quickly put in place, the country may witness a situation in which expected oil revenues will be wiped out by costs.

Buhari said:

“The ambitious goal of ramping up crude oil production to at least four million barrels per day, and building a reserve of 40 billion barrels remains sacrosanct and guiding principle to our overall outlook for the industry, creating a conducive business environment for hydrocarbon industry to thrive is no longer a choice. It is a necessity.

“In this regard, lower cost is critical. Cost is the energy of the future. The industry needs to drive down costs per barrel before it is exterminated by prices falling below production costs, a phenomenon we experienced at the outset of the pandemic.

“However, energy transition is real, renewable technologies are getting cheaper and investors are increasingly conscious of environmental issues and are beginning to turn their back on hydrocarbon investments, but history has shown that human beings have such an appetite for energy, which renewables do not have the capacity to cope with in the foreseeable future.

“Experts project that about 80 per cent of the world’s energy mix in 2040 will still come from hydrocarbons. Fossil fuels will continue to be the source of dozens of petrochemicals and petrochemical feedstock that companies transform into versatile and valued materials for modern life.”

He expressed the hope that the hydrocarbon industry will still remain a multi-trillion dollar industry in the coming decades, especially for a country with a vast hydrocarbon potential like Nigeria.