Kachikwu said this at the 33rd Annual International Conference and Exhibition organised by Nigerian Association of Petroleum Explorationists (NAPE) in Lagos.
The NNPC boss was represented by the Group General Manager, Nigerian Petroleum Investment Management Services (NAPIMS), Mr Dafe Sejebor.
Kachikwu said the nation should put up strategies to stay afloat in order to mitigate the impact of the fall in oil price in the industry and on the nation.
“We must renegotiate our contracts to reflect current market realities.
“If the cost/unit barrel remains exorbitant at current low prices, oil production becomes economically not viable; it will simply be left in the ground.
“Portfolios must be re-evaluated because now is the good time to optimise the company’s overall portfolio by restructuring capital allocation away from high-cost, lower-return projects,” he said.
The GMD listed survival strategies to include external financing, operational optimisation, review of fiscal terms, strategic merger and acquisition.
Others are re-engineering business models, reduction in operating expenditure cost, and financial resilience.
Mr Chikwe Edoziem, president of NAPE said low crude oil price should be seen as an opportunity to be efficient at every point along the value chain of the industry.
He said that the nation’s crude oil reserves, in the last five years had remained stagnant at 37 billion barrels, which was achieved in 2010.
Edoziem added that Federal Government target of 40 billion barrels by 2020 would remain a mirage if Joint Venture (JV), which is the country’s largest upstream arrangement in the industry, remained under-funded.
He urged government to give consideration to putting in place a self-adjusting fiscal regime that would take cognisance of the vagaries of crude oil price.
“Such fiscal regime should be structured to favour exploration work in the frontier areas like Dahomey Basin, Offshore Lagos, and Anambra Basin.
“And the unexplored deep opportunities within the high pressure/high temperature regime to meet our reserves replacement goals,” NAPE president said.
According to him, other emerging and worrisome development is the regulatory uncertainty and the sanctity of contractual and fiscal terms, and over tax.
“And concerted effort has not been made to encourage exploration to meet our reserves replacement goals,” he added.
Some stakeholders at the conference said that stage free fall of global crude oil prices had forced stakeholders to brainstorm on the necessary survival strategies for petroleum exploration and production.
They also argued that oil producers’ service companies and contractors should as a matter of urgency adopt survival strategies during the period.