Mr. Eze Onyekpere has voiced his concern over the fact that Nigeria’s oil production costs are now greater than Saudi Arabia’s. He expressed regret that Saudi Arabia only produces a barrel of crude oil for $10, whereas Nigeria produces a barrel for $48, according to him.CONTINUE FULL READING>>>>>
Onyekpere berated the Nigerian oil industry for its inefficiency, claiming that just a small percentage of oil earnings reach the typical Nigerian after accounting for production costs, deals with foreign oil companies, and the impact of corruption. According to him, a new and improved method for sharing the oil resource that benefits all of the nation’s residents must be developed.
He said in an interview with AIT, “Nigeria is reported to be producing a barrel of petroleum crude oil at $48. Now, at the high price of around $80, if you remove the cost of production being $48, what remains is $32. Out of that $32, in your production-sharing agreement with international oil majors, it’s 60/40. Do 60 percent of $32; you have less than $20, about 19 point something. So out of the $80, when you remove the cost of production, the federation account takes roughly 19 point something. Then the other people take the remaining. From that 19, you begin to share it among the tiers of government. After sharing it, you have the gatekeepers who will use public procurement and inflated contracts and take away. So, in actual fact, out of an $80 barrel, what gets to the common Nigerian may be less than $10 or $12.
If you factor in the cost of corruption and the gatekeepers who inflate everything, the ghost workers, the inflated contracts, and even among that $10 or $12, it will also include the money the lawmakers take, the money for presidential jets, and all those kinds of shenanigans. So in essence, that sector, any day I remember it, makes me weep. And so, when we are discussing the price of a liter, these are the bigger underlying issues. Nobody talks about them, but in the real sense. Why would we be producing oil at $48 per barrel while Saudi Arabia produces it at $10″.CONTINUE FULL READING>>>>>
