Nigeria’s Oil Production Cost To Crash As FG Approves Snake Island Port

Nigeria’s oil production cost which is said to be one of the highest in the world at $30 per barrel is to set for a crash as the Federal Government has approved the commencement, expansion and development of Snake Island Port, The Sun News reports.

The former Chairman of Jagal Group, owners of Snake Island Integrated Free Zone (SIIFZ) and Nigerdock, late Anwar Jarmakani, had lamented that Nigeria loses about $1.5 billion yearly over the monopoly in the logistics and supply services sector of the oil and gas industry.

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The former Jagal Group boss lamented that the oil and gas supply and logistics service in Nigeria remained the most expensive in the world, with monopoly adding an extra cost of $3-5 per barrel of crude oil produced in Nigeria, translating to over $1.5 billion per annum.

The fresh $1.85 billion investment capital outlay according to the project promoters-Jagal Group is premised on the Federal Government’s approval of the development of the Snake Island Port.

The deal which is to be executed through Public-Private Partnership (PPP) arrangement and comes with a new 45-year concession agreement that allows for an expanded operational scope.

The approval highlights the importance of PPPs in driving economic growth and development in Nigeria, especially at a time the country is experiencing a growth in PPPs over the last decade across different sectors from energy to infrastructure, transportation, and telecommunications.

Stakeholders have consistently clamoured for increased private sector involvement in financing critical infrastructural development in different sectors and as private sector players identify infrastructural gaps in the country’s maritime sector and take strategic steps to fill them, significant improvements in the sector are imminent.

Investments in Nigeria’s ports will improve efficiency in cargo handling and reduce turnaround times for vessels, high cost of shipping and the challenges currently experienced in logistics services.

Achieving significant cost savings for businesses increases competitiveness and provides a more business-friendly environment compared to other African countries.

Private investment also leads to the development of new technologies and innovations, which can further boost the sector’s growth and development and play a crucial role in driving the growth and modernisation of the oil and maritime sectors.

According to Jagal Group, the PPP project, which has been in the works for some years, will see Snake Island Port immediately commence operations as an expansion to Nigerdock’s existing operations, while the shipyard and Free Zone remain core parts of the business.

According to the firm, the move is set to spur economic growth and development in Nigeria and attract more clients to SIIFZ.

Earlier in his remarks, the Chairman of Jagal Group, owners of Snake Island Integrated Free Zone (SIIFZ) and Nigerdock, Mr. Anwar Jarmakani, lamented that Nigeria currently loses about $1.5 billion yearly due to the monopoly in the logistics and supply services sector of the oil and gas industry.

The Jagal Group boss lamented that the oil and gas supply and logistics service in Nigeria is the most expensive in the world, with the monopoly adding an extra cost of $3-5 on a barrel of crude oil produced in Nigeria, thus translating to over $1.5 billion per annum.

Jarmakani had lamented that the dominant monopoly in the Nigerian oil and gas logistics and supply services had existed for over 20 years, sabotaging the national economy, conspiring and working against potential competitors, particularly against SIIFZ.

‘‘This monopoly has consistently and aggressively used different government institutions, which included Customs, NPA, Ministry of Transportation and others to harass, compromise and entrench its monopoly position with impunity,’’ he regretted.