FG Laments Rising Cost Of Crude Production

The federal government on Tuesday, argued that high cost of crude production had eroded net revenue from crude sales and depleted resources earmarked for development.

Speaking during the 9th Annual Practical Nigerian Content Forum (PNCF) organised by CWC Africa in partnership with the Nigerian Content Development and Monitoring Board (NCBMD), the Minister of State for Petroleum, Chief Timipre Sylva, ranked crude production cost in the country as one of the highest among the Organization of Petroleum Exporting Countries (OPEC).

Sylva at the PNCF, which held at the NCMDB’s new headquarters in Yenagoa, Bayelsa State, said the Federal Government under President Muhammad Buhari was working to guarantee the security of oil production and increase the contribution of the oil sector to the Gross Domestic Product (GDP).

He said: “We must therefore take practical steps to ensure that we curtail the various elements that contribute to the high cost of production.

“The Ministry of Petroleum Resources under my supervision has selected key priority areas to contribute to the improve production, low cost of production of crude and the increase in the volume of the production capacity of the country.

“The areas are the eradication of smuggling of PMS across Nigerian borders; the completion of Gas Flare Commercialisation Programme; Increase of Crude Oil production to three million barrels per day and Reduction of the cost of Crude Oil production by at least five per cent.

“Other priorities are the increase of domestic refining capacity and implementation of the amended Deep Offshore and Inland Basin Production Sharing Contract Act.

“The key outcomes of these priority areas will be job creation and Poverty Reduction, which are the cardinal aspirations of the Next Level Agenda of President Muhammadu Buhari’s Government.”

Sylva commended the NCMDB led by Simbi Wabote and declared that the Federal Government was happy with the board’s performance over the years.

He said: “At the Ministry of Petroleum Resources, we are proud of Nigerian Local Content achievements in the oil and gas sector.

“We are delighted at the various capacities and capabilities that have been put in place since the enactment of the Nigerian Content law.

“We are also proud that these achievements are well recognized in the continent to the extent that some African countries like Kenya, Congo Brazzaville, Uganda, Gabon and Angola have come to Nigeria in the past for mentorship and peer assistance on Local Content practice and implementation.

“As you might recall, this Administration had taken strategic steps to entrench Local Content implementation beyond oil and gas through the Presidential Executive Orders 03, 05 and others.

“We are also aware of the recent pledges by the Local Content Committees of the Senate and House of Representatives to extend the Nigerian Content Act to other key sectors of the economy.

“This is because we can all see the benefits so far realised from the implementation of Nigerian Content requirements in the oil and gas industry”.

He also hailed the management of the NCDMB for hosting the 9th forum in Yenagoa and at its magnificent 17-storey building.