Security Challenges Drive Nigeria’s Oil Production Costs to $30 Per Barrel — NNPC Chief
Nigeria’s crude oil production costs have soared to between $25 and $30 per barrel — more than twice the global average — due largely to escalating security expenses in the Niger Delta, according to the Group CEO of the Nigerian National Petroleum Company Limited (NNPC), Bayo Ojulari.
Ojulari made the revelation on Thursday in an interview with Bloomberg during the 9th OPEC International Seminar in Vienna, Austria. He pointed to pipeline security investments as the major driver behind the country’s unusually high production costs, which sharply contrast with Saudi Arabia’s benchmark of $5 to $10 per barrel.
“The operating cost right now in Nigeria is hovering over $20 per barrel, which is quite high,” Ojulari said. “Part of the reason is the investment we’ve had to make in terms of securing our pipelines, which are now 100 percent available.”
He explained that Nigeria has shifted from a policing-only approach to a more sustainable model involving partnerships with both government security agencies and community-based surveillance teams. The move, he said, has not only enhanced infrastructure security but also created jobs and improved relations with host communities.
“This wasn’t a quick fix,” Ojulari noted. “It took years of policy alignment, and today we are seeing a sustainable approach that’s reducing theft and vandalism. We needed to create interdependence with the community, and that is beginning to yield results.”
Dangote Refinery: No Mandated Supply Policy
On crude oil supply to the newly operational Dangote Refinery, Ojulari clarified that there will be no government-imposed mandates to supply Nigerian crude to the private facility.
“We want to move away from government domination in private sector businesses,” he said. “If Nigeria is going to supply more crude to the Dangote Refinery, it will be based on a commercially negotiated ‘willing buyer, willing seller’ arrangement — not a policy.”
Production Growth and Future Targets
Ojulari also outlined Nigeria’s oil production growth trajectory, revealing that the country’s daily output rose from 1.56 million barrels in March to 1.63 million barrels per day, including condensates. He expressed confidence that production could reach 1.9 million barrels by the end of 2025, with an ambitious long-term target of 2.06 million bpd by 2027.
In the gas sector, Nigeria aims to boost output from 7 billion to 10 billion cubic feet per day within the same timeframe.
Refinery Rehabilitation Under Review — Sale Not Off the Table
Commenting on the troubled rehabilitation of Nigeria’s state-owned refineries, Ojulari admitted the process has faced significant technical hurdles.
“We’ve brought in a lot of technology, but some of it hasn’t performed as expected,” he said. “With these old and long-abandoned refineries, it’s become a more complicated task than initially anticipated.”
When asked if a potential sale of the refineries was being considered, Ojulari responded: “All options are on the table. The final decision will depend on the outcome of our ongoing review.”
Call for Energy Equity and Market Stability
Ojulari concluded with a call for greater global energy equity, particularly for African nations where millions still rely on biomass like wood and charcoal for cooking — a situation that poses severe health risks, especially for women and children.
“We need to look at the world as one system with equity and balance,” he emphasized.
He also backed OPEC+ efforts to stabilize the global oil market, warning that the current tight supply conditions stem partly from reduced investments amid the energy transition push. He described OPEC+ interventions as crucial for the benefit of both producing and consuming nations.
