FG raises concern over high cost of crude oil production, others

The Federal Government has expressed concern over the rising cost per barrel of Crude oil production in the country, describing it as an anomaly that has erodes our net revenue from crude oil sales and depletes the resources meant for development.

The Minister of State for Petroleum Resources, Chief Timipre Sylva, while speaking during the 9th Annual Practical Nigerian Content (PNC) Forum organised by CWC Africa in partnership with the Nigerian Content Development & Monitoring Board (NCBMD) with the theme, “Leveraging Local Expertise for Market Growth & Expansion”, in Yenagoa, Bayelsa State, said that the nation’s cost of production per barrel of crude oil is one of the highest among the organization of the Petroleum Exporting Countries (OPEC).

Sylva said the Federal Government under President Muhammad Buhari is doing all possible to increase the contribution of the oil sector to the Gross Domestic Product (GDP) and guarantee the security of oil production,” We must, therefore, take practical steps to ensure that we curtail the various elements that contribute to the high cost of production”.

He also noted that the Ministry of Petroleum Resources under his 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.

According to him, the areas include the Eradication of smuggling of PMS across Nigerian Borders; the Completion of Gas Flare Commercialization Program; Increase of Crude Oil production to 3 million barrels per day and Reduction of the cost of Crude Oil production by at least 5 per cent.

“Other priorities include; the passage of the Petroleum Industry Bill; Increase of domestic refining capacity and implementation of the amended Deep Offshore & 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.”

On the local content drive of the Nigerian Content Development & Monitoring Board (NCBMD) under the leadership of the Executive Secretary, Engr. Simbi Wabote, Chief Timipre Sylva commended the Board and declared that the Federal Government is impressed with its performance over the years.

“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”, he said.

Also speaking, Mr Victor Okonkwo, the Managing Director of Aiteo E&P Limited, operator of the 45per cent stake in OML 29 and the Nembe Creek Trunk Line (NCTL). OML 29 in entirely Situated within Bayelsa state, noted that the company represent a testimony of what local content, underpinned by dogged entrepreneurship can achieve,” In Aiteo we are nearly 98 per cent locally staffed and our contractors are largely local. Our procurement of goods and services are also mainly through local suppliers.”

He, however, noted with concern that one of the biggest challenges, we face in our operations is the security of our pipelines and oil facilities. Our pipelines and flowlines are constantly vandalized by unscrupulous elements tagged ‘crude oil thieves’ attempting to cause economic sabotage to our Company and the people of this great Country.