The Minister of State for Petroleum Resources, Dr Ibe kachikwu said it was too early to lament over the declining oil price noting that the government was aware of an impending fluctuation.
Kachikwu made this known while fielding questions from newsmen, on Thursday in Abuja.
He said that the Federal Government was not ruffled by the declining price of crude oil in the international market.
He added that government effort was to shift its emphasis to cutting down drastically on the cost of crude oil production to increasing the country’s profit margins from the commodity.
“I do not think we need to be panicky about it. We hit an all-time $70 per barrel in December, which surprised a lot of us.
“ And that was because of the huge amount of work done in OPEC. We are not ruffled by it. I know it is coming down to the higher $60s now.
“Shale is going to be active. We know that whenever we are in excess of $65 per barrel, shale gets very active because the fundamentals become much more supportive to more investments and more production lines.” he said
However, he noted that it was high time OPEC and its member countries focused on themselves and what each of them needed to do and ignore whatever is happening to shale oil.
Kachikwu also added that every OPEC producer must work hard to become a least-cost oil producer, stating that if shale oil can produce and sell at $65 per barrel, there was absolutely no reason why Nigeria and other OPEC member country should be struggling.
“The fundamentals of our earnings, how efficient we are; our cost of production is work that we need to do internally.
That does not depend on OPEC.
“If you look at what is happening at Saudi Arabia and UAE, there is a fundamental rejigging of their production models to ensure that they are getting the very best in terms of their prices and their cost is going down.
“One nice thing about low prices is that it forces everybody to abandon high cost production.
“Even for the projects we are doing today, we are looking at it again to see if it makes sense; whether if the oil in the ground is not going to yield money to the Federal Government.
“We are doing a lot of work on the cost aspect.” He added
The Minister also insisted that more fundamentally, each member countries would need to work internally to ensure they are getting the best margins out of what they are doing.