Minister of State for Petroleum Resources, Ibe Kachikwu has said Nigeria will stop oil production if the cost of producing remains high.

Kachikwu said this in his address at the opening ceremony of the Nigeria Annual International Conference and Exhibition organised by the Society of Petroleum Engineers in Lagos on Monday.

“When you look at the cost of production in Nigeria, it remains blatantly high. Our cost per barrel today is about $27 per barrel for JV (joint venture) fields. In Saudi Arabia, it is about $9. So we are way apart in terms of cost that anything that happens will hit us very hard,” Kachikwu said.

He added that Arab countries had cut production costs, becoming the lowest-cost producers in the world.

[Read Also: Oil prices will affect capital projects in 2017 budget – Kachikwu]

The minister said, “Even though we have been singing over the last two years that we need to drive cost down, the current figure that I still have showing me the numbers of last year have not shown me a major dramatic reduction in the cost of production.”

He added that “there is no way this country will produce oil at this sort of swelling prices that we see; there will be no margins left for this country.”

[Read Also: $1.2bn needed to repair NNPC refineries – Kachikwu]

“For me, you rather leave the oil in the ground than produce at a cost that doesn’t make sense. So, cost is going to be a very high driver. So that is certainly one area we are focusing on; we are working collaboratively with oil companies.

“But let’s make no mistake about it: If we cannot negotiate it down, we will compel it or we will stop the production; it does not make any sense,” Kachikwu added.