KUWAIT CITY (AFP) – A parliamentary committee has asked Kuwait’s Audit Bureau to investigate why the cost of oil production has tripled over the past six fiscal years, the head of the committee said Saturday.
“We have asked the bureau to prepare a report on the causes of the steep rise of the production cost and elements included in calculating the cost,” MP Adnan Abdulsamad told AFP.
Al-Shall Economic Consultants said in a report published Saturday that the production cost has increased from 1.4 dollars a barrel in 2001 to 4.42 dollars a barrel in 2007, growing by 18 percent annually on average.
The report is based on official statistics.
Al-Shall attributed the rise to one of three possible reasons: that Kuwaiti oilfields have become too old thus making it difficult to control production costs, that additional unnecessary expenses are included in cost, or that the cost is being deliberately altered.
OPEC member Kuwait is pumping around 2.4 million barrels per day, and a three dollar increase in the production cost of each barrel means additional expenses to the tune of 2.6 billion dollars annually.