Mr. Eze Onyekpere has expressed his worry on the fact that the production cost of oil in Nigeria has risen to a level higher than that of Saudi Arabia. He said it was sad that while Nigeria produces a barrel of crude oil at $48, Saudi Arabia achieves the same at only $10.…..For More READ THE FULL ARTICLE HERE ▶▶
Thank you for reading this post, don't forget to subscribe!Onyekpere lambasted the Nigeria’s oil sector for inefficiency, arguing that after adding up the cost of production, international oil company deals and the effect of corruption, just a small portion of the oil earnings gets to the average Nigerian. He said there is a need to come up with a new and better system of sharing of the oil resource in a way that benefits all the citizens of the country.
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”.…..For More READ THE FULL ARTICLE HERE ▶▶
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