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Nigeria’s Oando relaxed about oil price, finance

By on January 31, 2009

Armand Djoualeu
Nigeria’s top fuel retailer and gas distributor Oando Plc is confident it will secure financing for ambitious expansion plans and says the projects are profitable at current oil price levels

As projects elsewhere are scrapped or delayed because of the economic crisis and weak prices, Group Chief Executive Wale Tinubu told Reuters the cost of oil exploration in Nigeria ranged from $5 to $25 a barrel.
It was clearly profitable at prices of around $40, although he would prefer higher prices.

“A reasonable price for oil would be $50-$70,” he said late on Friday, adding to an ongoing debate on the right level.

BP Chief Executive Tony Hayward on Thursday said an oil price of between $60 and $80 a barrel was appropriate.

Earlier in the week, the head of Nigeria’s state oil firm the NNPC said oil prices needed to stay above $40 a barrel to keep deep offshore oil production and exploration economically viable in Nigeria.

While oil has plunged by more than $100 from an all-time high of nearly $150 a barrel in July last year, other commodities, such as steel, have also dropped sharply in value.

Tinubu said it was too early to say whether that would lead to lower production costs.

About Armand Djoualeu

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