Mkpoikana Udoma
Yenagoa — Nigeria’s persistent struggle with high oil production costs is being driven by two major pressures, crippling vandalism and inflated joint-venture, JV, cost claims, according to the Petroleum Technology Association of Nigeria, PETAN.
Speaking during a panel session on Nigeria First Policy: Pathway for Growth at PNC 2025, PETAN Chairman, Wole Ogunsanya, said the country is now paying some of the highest crude-evacuation costs in the world, undermining competitiveness and investment appetite.
“The number one cause of high cost of oil production in Nigeria today is vandalization; vandalization of assets and evacuation of crude oil,” Ogunsanya declared. “You have people in the swamp paying $12 per barrel to move crude oil from one point to another. That’s the highest cost we have in Nigeria.”
He added that while insecurity remains a major drain, JV partners, both international oil companies and indigenous independents, are also contributing to the cost crisis through inflated claims.
“As the Chairman of PETAN, and I’m going to be brutally honest, the costs we are seeing from the JV partners, both the IOCs and the independents, are inflated. I don’t have any shame in saying it,” he said.
Ogunsanya stressed that Nigeria’s cost structure has become grossly uncompetitive when compared to peer producing nations.
“When you look at these costs, it’s too high compared to other countries,” he said. “These are the two main areas we want the system to address.”
He urged government and regulators to prioritise solutions that directly tackle evacuation challenges, while calling on operators to embrace transparency and global benchmarking.
“One area is evacuation, which is the government’s vision to deal with. The second is for JV partners, whether indigenous or multinational, to review the costs being presented compared to other countries,” he said.
