Connect with us

Oil & Gas

Effective system will realise $10 crude oil production cost target -Expert

Published

on

Effective system will realise $10 crude oil production cost target -Expert


Chairman, the Society of Petroleum Engineers (SPE) Nigerian Council, Joe Nwakwue has urged the federal government to ensure effective operational system to enable it achieve the proposed 10 dollar per barrel crude oil production cost.

Nwakwue made this known at an online workshop on the Competitiveness of Nigeria’s Fiscal Regime, organised by the Facility for Oil Sector Transparency and Reform (FOSTER).

He said government should not give orders and anticipate positive result but ensure systems were in place for things to work out effectively.

He said that the 10 dollars crude oil production cost target as announced by the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Malam Mele Kyari, was a nice move.

He said that Kyari needed to make more clarification on the target and ensure that all partners were carried along on in the process.

“We need to put system in place that will help things to work, if you make it an order or mandate, it might not work out,’’ he said.

He further decried that the high cost of oil production in the country could lead to a very low return, just as the subsidy schemes remained a waste.

He added that there was a total disconnect between the oil sector and the entire economy, with a very low contribution to Gross Domestic Product (GDP).

He named Royalties, government stake, Tax rates, insecurity among the major challenges of ensuring low unit production cost.

He said that there was the need for a new fiscal regime that would help to tackle the challenge to ensure economic growth and development in the country.

Nwakwue noted that price-fixing, and the lapses in the NNPC Act, especially with the overburdened political interference remained critical challenges to the existing framework.

He said the fiscal system should be designed with revenue distribution in mind, as Nigeria needed a saving scheme to cushion price shocks, which may impact fiscal outlook.

In his presentation, Prof. Wumi Iledare, Professor of Petroleum Economics and Management, said that the importance of a new fiscal regime cannot be over emphasized.

He said that there was the need for a new fiscal regime that would be competitive, adding that government must ensure they separate the fiscal policy institutions, commercial and regulatory institutions.

Iledare canvassed clear mineral owner objectives, a downward review of the total marginal tax rate to attract investments as well as royalty rate for flexibility and progress.

He called for dual tax system and output based incentives, adding that Nigeria’s fiscal system design should enhance indigenous participation and utilisation of its resources.

Edited By: Ismail Abdulaziz (NAN)

Edith Ike-eboh: is a graduate and a professionally trained journalist, with experience in national news reporting/editing and verification at the News Agency of Nigeria. NNN is a Nigerian online news portal that publishes breaking news in Nigeria, and across the world. Our journalists are honest, fair, accurate, thorough and courageous in gathering, reporting and interpreting news in the best interest of the public, because truth is the cornerstone of journalism and they strive diligently to ascertain the truth in every news report. Contact: editor[at]nnn.com.ng

Lawyer calls for arrest of publisher for infringing right WHO ramps up COVID-19 support to hotspot countries in Africa Man, 24, bags 4-year jail term for burglary, stealing Osinbajo wants innovative technology suitable for courtroom Floods displace 150,000 in eastern South Sudan Court fixes Sept. 29 to rule in no-case-submission filed by El-Zazaky Britain to fund Northern Ireland trade declaration system Lagos Govt. conducts 66,000 COVID-19 sample tests NEMA warns of likely flooding in 28 states, 102 local governments Trader arraigned on alleged theft of laptop, cell phones Minister appeals to NASS for improved budget for physical planning in FCT Rotary Governor tasks members on impactful projects for underprivileged Kwara community hands over upgraded NSCDC outpost, donates patrol vehicle Soil Science Institute partners ministry to enhance food production Tricycle rider docked over alleged phone theft Woman in court for allegedly misappropriating N144, 740 Gov. Okowa felicitates Obiano at 65 NLC urges Air Peace, others to reinstate sacked workers within 2 weeks Court dissolves 13-year-old marriage as wife starves husband of sex COVID-19: Mobile court convicts 39 defaulters for violating protocols in Edo LASUTH Medicine Dept donates scrubs to doctors Ganduje wants partnership with FG to boost gold trade Nigerian Shippers’ Council donates medical items to Ilorin General Hospital Insecurity: Gov Bagudu urges traditional rulers to support community policing Businessman in court over alleged N1.4m fraud Buhari meets Edo APC Gubernatorial Candidate,Ize Iyamu at Aso Villa Oil slips below $45 on-demand concerns, set for weekly rise Mauritius facing environmental crisis after oil spill Sumo wrestler’s retirement offer rejected in spite of breaking COVID-19 rules Court remands man for allegedly defiling 13-year-old Quail meat, an antidote for hypertension-Scientist Russia’s coronavirus vaccine undergoes final testing phase DPR seals 8 stations over unsafe practice in Akwa Ibom Malaysia’s ex-finance minister hit with kickback charge, wife arrested Alleged rape: Court remands man pending legal advice Africa’s COVID-19 cases hit 1m, with South Africa worst-hit LASG directs JSS 3 students to resume Monday FG to encourage more private/public partnership to boost domestic gas Flood wrecks havoc in Kafanchan NNL 2020/21: Gov. Makinde sets promotion target for 3SC New South Wales offers to host Australian Open as Melbourne battles COVID-19 spike It’s tough to stay focused at spectator-free events, golfer says NGF pledges to provide support for performance assessment of states Oyo agriculture college chairman pledges commitment to institution’s growth NCDC confirms 354 new COVID-19 cases as total hits 45,244 Gov. Bagudu sets up committee to refund Hajj deposits to pilgrims Gov. Bagudu distributes CACOVID food, relief materials to 38,047 households COVID-19: Osun Govt warns against indiscriminate decontamination, fumigation FG launches distribution of agricultural inputs in Cross River COVID-19: Ooni urges Africans to contribute to global development