Nigeria’s oil fields in danger of shutdown amid price slump

Production from Nigeria is now facing a decline as some oil fields face an imminent shutdown if the low oil price persists.

Analysts say operating some of the fields in the country are becoming uneconomic, with the selling price of oil being driven down close to the production cost level.

According to the latest data obtained from the Central Bank of Nigeria, the price of the Nigerian crude oil, Bonny Light, has fallen to $29.47 per barrel.

READ: Stocks, commodity currencies slide as oil falls back below $30

The Project Director for the Uquo gas field development, Alhaji Abdullahi Bukar said, “When oil price drops, we are all in serious trouble, because if the oil price and your unit operating cost are almost the same, it means that when you sell the oil, there is little profit or you are at a loss.”

He added that “The unit technical cost of many of our producers is not far from $30 per barrel. So many companies are in trouble”.

“For some fields, the production cost is well above $25, maybe $28. For some fields, it is well below $20 and $25. Many of the older fields, which are mostly with the International Oil Companies, have got high production costs”.

Experts also say the continued decline in global oil prices would stall a number of deep-water projects in the country.