Mr Sylva made the remark at a Seminar on Effective Cost Management in the oil and Gas sector in Abuja on Tuesday.
The seminar was organised by Petroleum Technology Development Fund, PTDF, in collaboration with Quantity Surveyors Registration Board of Nigeria, QSRBN.
He said Nigeria must strive to reduce cost of crude production to help boost revenue generation for economic growth and development.
“Let me go back the memory lane, the technical cost of crude oil production in the 80s/90s was around four dollars per barrel.
“In the early 2000, it was between five dollars and six dollars per barrel while today, it is over 35 dollars per barrel.
“It is interesting to note that some countries like Kuwait and UAE are producing at less than 10 dollars per barrel.
“In the regime of 50/60 dollars per barrel price of crude oil, a cost of over 30 dollars is unsustainable and that is why we need to come up in this programme on what we need to do to reverse the trend, “he said.
The minister noted that Nigeria, the largest economy in Africa with Gross Domestic Product, GDP, of 400 billion dollars and population of over 180 million, needed aggressive industrialisation and economic diversification.
He said in spite of the quest for economic growth and great investment opportunity in the oil and gas sector, the cost of crude oil production in Nigeria remained one of the highest in the world.
He said government had set target through an industry policy document to reduce the cost of crude extraction by at least 30 per cent.
He said the document recognised that to cut production cost, reducing contract approval cycle, transparency, regulatory transaction cost among others was imperative.
“Currently, there is industry committee headed by the permanent secretary on reduction of crude oil cost production and crashing of contracting cycle in the ministry,” he said.
The minister commended PTDF and QSRBN and urged quantity surveyors as cost engineers to deploy the principles of total cost management and come up with solution on how to minimise the impact of cost drivers.
He named the drivers to include corruption, national body policies, infrastructure deficit, bureaucracy, regulatory issues and insecurity in the oil producing region.
“I wish to seek for your indulgence to always come up with your contributions on better ways to achieve effective cost management in the oil sector.
“It is my hope that we shall all use the outcome of this conference to give our oil sector the propulsion they require to bring down the cost of crude oil production to a single digit as obtainable in the other economies.
“This is an urgency of yesterday, ” he said
The minister was represented by his Chief of Staff, Mr Moses Olamide.
The Minister of Works and Housing, Babatunde Fashola, said the oil and gas sector was one of the most important in Nigeria’s economy as it contributed about 10 per cent to the GDP.
He said President Muhammadu Buhari’s administration placed high premium on projects and administrative cost reduction, adding that organising a seminar as this was in consonance with the Next Level Agenda.
He noted that the activities in the sector were crucial and relevant to the growth and prosperity of Nigeria.
“Registered quantity surveyors, equipped with the requisite knowledge and skill in cost management, cost auditing, cost appraisal, hold the key to unravel the mystery behind the high cost arising from factors other than market forces.
“The involvement of quantity surveyors in oil and gas sector such as exploration, pipelines installation, road, bridges, building, heavy engineering services with other professionals will ensure efficient allocation and utilisation of resources, probity, value for money in our infrastructural development in Nigeria,” he said.
Dr Bello Gusau, the Executive Secretary of PTDF, said that in the fund’s industry skill and competency gap analysis, issues of cost engineering control, estimating was among the areas of greatest challenge in the oil sector.
“It is against this background that the fund is collaborating with QSBRN in organising this workshop towards placing this very important issue in the front burner,” he said.
He said PTDF was willing to partner and collaborate with industry players in finding solution to critical issues affecting full realisation of government vision for the oil and gas sector.
“We will be prepared to work with professional bodies and academia towards developing home grown solution to support industry efforts to stay competitive through effective cost management,” Gusau said.
Also, Murtala Aliyu, President QSRBN said every sector needed cost effectiveness to ensure value and growth.
He said cost effectiveness in the oil and gas sector was necessary because of its role in the economy.
He restated the readiness of QSRBN to play its role in cost reduction in the oil and gas sector to foster growth and development.