A report by the Nigerian Upstream Petroleum Regulatory Commission has estimated that the cost of producing crude oil in Nigeria has increased to almost $40 per barrel.
Compared to the $10 per barrel cost of producing the same crude in Saudi Arabia, this is 300% more expensive, The Punch reported.
The NUPRC claims that Nigeria is finding it more and more difficult to compete on the international scene as a result of growing production costs and fluctuating oil prices.
The NUPRC said in a publication:
Given that high production costs might restrict investor profitability, especially during periods of low global oil prices, the commission is concerned that this disparity would hinder Nigeria’s capacity to draw in quality investment and compete globally.
According to a Punch report, a producer may have spent more than half of the price on production if petroleum sells for an average of $75 a barrel.
The regulator pointed out that the nation is aware of the difficulties.
The NUPRC revealed that attempts are underway to bring the production cost down to $20.
It argued that an oil business that does not prioritize production cost efficiency will surely find it difficult to attract new investment, hold onto larger profit margins, increase its ability to withstand market volatility and achieve overall economic growth.
Given that oil makes up about 90% of Nigeria’s export earnings and a sizable amount of the government’s income, it was said that the high cost of oil extraction presents threats to the stability and expansion of the economy.
According to the regulator, Nigeria has significant challenges in achieving the goal, but the immediate and long-term advantages of lowering production costs cannot be emphasized.
TimesNow.com.ng earlier reported that the mega Dangote Refinery sold two consignments of jet fuel to Saudi Aramco, the world’s biggest energy company valued at $1.92 trillion.
The move establishes Dangote Refinery as a global leader in the energy business.
President of Dangote Industries Limited, Aliko Dangote, disclosed this to the directors of the Nigerian Economic Group (NESG) during the facility’s tour on Tuesday, February 4, 2025, saying the refinery was making giant strides.
Proofread by Kola Muhammed, journalist and copyeditor at TimesNow.com.ng
Source: TimesNow.com.ng
