Abstract
This study evaluates petroleum production cost per barrel in Nigeria through an integrated assessment of operational, technical, fiscal, and country-specific cost drivers. Owing to the limited availability of publicly accessible and non-proprietary cost data, the study adopts a survey-based methodology, drawing on expert responses obtained from 208 professionals across the Nigerian upstream oil and gas value chain, including regulators, international oil companies, indigenous operators, and academia. Quantitative responses were analysed using descriptive statistical techniques, while qualitative inputs were examined through thematic content analysis. Findings identify drilling and completion expenditure, lifting operations, logistics, statutory obligations, infrastructure, and security as dominant cost determinants. Country-specific factors - particularly crude theft, pipeline vandalism, community relations costs, and import dependence for oilfield equipment significantly differentiate Nigeria from lower-cost global producing regions. Production cost clusters within the $20–40/bbl range, with a weighted benchmark estimate of approximately $30/bbl. This aligns with regulatory and industry-reported cost ranges for Nigerian upstream operations. The study situates Nigeria within the global upstream cost curve as a mid to high cost producing nation, higher than core OPEC producers but competitive relative to frontier offshore basins. Policy implications are framed in the context of the Upstream Petroleum Operations Cost Efficiency Incentives framework, highlighting pathways for cost optimisation, regulatory efficiency, oil infrastructure, security, and technology deployment. The findings provide evidence-based guidance for policymakers, regulators, and investors seeking to enhance cost competitiveness and long-term sustainability of Nigeria’s upstream petroleum sector.
Keywords
Petroleum production cost; Upstream economics; Cost drivers; Nigerian factor; Cost benchmarking
Citations
IRE Journals:
Izuchukwu Onuche, Nanjul James Bali "Petroleum Production Cost in Nigeria: Drivers and Benchmarks" Iconic Research And Engineering Journals Volume 9 Issue 8 2026 Page 741-748 https://doi.org/10.64388/IREV9I8-1714292
IEEE:
Izuchukwu Onuche, Nanjul James Bali
"Petroleum Production Cost in Nigeria: Drivers and Benchmarks" Iconic Research And Engineering Journals, 9(8) https://doi.org/10.64388/IREV9I8-1714292
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