With oil prices at 13-year lows, Nigeria may be continuing production at a $5 loss per barrel, Vanguard reported. Chairman of the Petroleum Technology Association of Nigeria, Emeka Ene, explained that the “current price is below Nigeria’s average of between $30 and $35 per barrel. Most marginal field producers are producing above $30 a barrel, and with pipeline vandalism activities, costs will shoot up by another $10 a barrel, so oil production now is not sustainable.”

Industry leaders who spoke with Vanguard characterized the situation as serious and in need of government attention, or some domestic firms may be harmed with greater economic repercussions. Ene said that “a lot of Nigerian companies are out of work because they cannot compete with the multinationals, so government needs to have a serious talk with stakeholders in the industry.”

Ene stated that high systemic costs and other problems have raised the costs of production to current levels, leading to losses. “Nigeria has a thriving local oil industry, and if properly supported, can push down cost of production to $10 per barrel. About 10 to 15 years ago, industry cost was below $10 per barrel and nothing much had changed,” he said. He urged the government to become more fiscally disciplined, to diversify the economy and to re-evaluate some policies harming Nigerian oil: “Federal Government agents charging unrealistic charges like asking for $10m for permits need to be looked into.”