Minister of State for Petroleum Resources, Timipre Sylva, yesterday revealed that Nigeria still spends around $30 in producing a barrel of crude oil despite the undulating price of the commodity at the international market.
Although the Federal Government has been making efforts to bring down the cost to about $10, the current cost for Joint Venture production is 300 per cent higher than the projected target.
Speaking at the launch of the Nigerian Upstream Cost Optimisation Programme (NUCOP), in Abuja, Sylva put the figure for joint venture production at $20/barrel, and Production Sharing Contract (PSC) at about $20/barrel.
Oil price has been unstable for over two years, as the Organization of the Petroleum Exporting Countries (OPEC), and its allies had repeatedly cut supply to the market to defend the price. Although the price stood at about $60.64 per barrel yesterday, it had slumped into negative in 2020, on the backdrop of the COVID-19 pandemic.
With Nigeria’s heavy dependence on crude oil for revenue and without refineries to process the crude, high cost of oil production means low revenue or losses, depending on the price at the international market.
Sylva had insisted that there was a need for cost optimisation to keep the oil and gas industry afloat in Nigeria.
-THE GUARDIAN (NG)