The Chairman, House of Representatives Committee on Appropriation,
Abdulmumin Jibrin, said yesterday that Nigeria was losing an average of
N1 trillion annually in cash calls and production costs with regard to
crude oil activities, Vanguard reports.
Jibrin disclosed this to journalists while fielding questions on the 2016 budget that had passed through second reading in the House. He said: “One very important aspect that swallows a large chunk of the money in the budget is the cash call and production costs. Many people take their eyes away from production costs”.
“But it is critical, this is because every year we pay an average of one trillion naira as cost of production. So, it is important that this time around, we need to sit with relevant authorities in the oil and gas sector to see the details of this production cost, to ensure the country is not just being shortchanged. “We are just mopping a lot of money from the first line charge just to give to our foreign partners”.
He also said that as a result of the dwindling international market price of oil, the House would consider a reduction of the benchmark, which was pegged at $38 per barrel at the time the budget proposal was prepared. He noted that with the current price of about $30 per barrel, there was the need to review the benchmark to meet up with the current realities.
Jibrin disclosed this to journalists while fielding questions on the 2016 budget that had passed through second reading in the House. He said: “One very important aspect that swallows a large chunk of the money in the budget is the cash call and production costs. Many people take their eyes away from production costs”.
“But it is critical, this is because every year we pay an average of one trillion naira as cost of production. So, it is important that this time around, we need to sit with relevant authorities in the oil and gas sector to see the details of this production cost, to ensure the country is not just being shortchanged. “We are just mopping a lot of money from the first line charge just to give to our foreign partners”.
He also said that as a result of the dwindling international market price of oil, the House would consider a reduction of the benchmark, which was pegged at $38 per barrel at the time the budget proposal was prepared. He noted that with the current price of about $30 per barrel, there was the need to review the benchmark to meet up with the current realities.
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