James Faleke, Chairman of the House of Representatives Committee on Finance, has said Nigeria’s oil production cost per barrel stands at $48, the highest globally.
Speaking during a meeting between the House Committee on Finance and the management of the Nigeria National Petroleum Company Limited, Faleke highlighted the concerning implications of such exorbitant production expenses on the nation’s revenue.
Faleke’s remarks underscored the significant disparity between Nigeria’s production cost and those of other major oil-producing nations.
Comparatively, Saudi Arabia reports a production cost of $9 per barrel, Norway at $21, and the United States at $24, significantly lower than Nigeria’s figure.
The House Committee Chairman emphasized that despite the escalating production costs, Nigeria’s oil output continues to dwindle, exacerbating the negative impact on government revenue.
With crude oil prices hovering around $80 per barrel in the international market, Faleke revealed that only $32 remains available for the government to share with oil companies after accounting for production expenses.
The revelation raises concerns about Nigeria’s economic sustainability and underscores the urgent need for strategic reforms within the oil sector to enhance efficiency and reduce production costs.
As Nigeria grapples with economic challenges exacerbated by high inflation rates and revenue losses, addressing the root causes of exorbitant production expenses emerges as a critical priority for ensuring fiscal stability and sustainable economic growth.