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Senate fumes over high cost of oil production in Nigeria
Jun 1, 2020
Senators on Monday kicked against the revelation by the management of the Nigeria National Petroleum Corporation ( NNPC), that the corporation makes a marginal $3 profit per barrel in oil production.
They called on the federal government to get the nation’s economy diversified as quickly as possible to avoid a total meltdown of the country.
Information on the high cost of oil production which is $21.2 per barrel, almost equaling $25 per barrel oil price benchmark fixed for the N10.509 trillion 2020 revised budget, came to the fore when officials of the corporation appeared before the Senate Committee on Finance.
Trouble for the Nation’s cash cow started when its Chief Operating Officer ( Upstream) , Engineer Yemi Adetunji was called upon by the Chairman of the Committee, Senator Solomon Olamilekan Adeola (APC Lagos West) to explain why cost of oil production in Nigeria is far higher than those of other oil-producing countries of the world.
According to Senator Adeola, while the cost of oil production in Saudi Arabia is $4 per barrel and $3 per barrel in Russia, it is $21.2 per barrel in Nigeria, indicating very poor marginal profit of about $3per barrel based on new oil price benchmark of $25 per barrel.
The NNPC COO in his response attributed the high cost of oil production to series of peculiarities ranging from security to crude oil theft.
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