Stakeholders raise concern over poor metering for crude in Nigeria
The Nigeria Extractive Industries Transparency Initiative (NEITI), and other stakeholders in the oil and gas sector, yesterday, in Abuja, insisted that inadequacy in the metering of crude oil production in the country could continue to affect the nation’s revenue.
Indeed, without urgent efforts to address the situation, the stakeholders believe the volume of oil stolen from the country may persist.
While some industry players admitted to the presence of metering in some cases, but they insisted that current installations fail to comply with extant regulations.
Identifying metering challenges as a major source of revenue loss in Nigeria’s petroleum and mining sectors, as previous NEITI audit report had quoted that as much as $4.1billion have been lost to the gap, with about 106,861,842 million barrels of oil not adequately accounted for.
Speaking at a workshop on the development, Executive Secretary of NEITI, Waziri Adio, who was represented by NEITI’s Director of Communications, Dr. Orji Ogbonanya Orji, noted that against the practice in other oil-producing countries, Nigeria remained one of the few countries without adequate metering infrastructure for oil and gas.
“Stealing of Nigeria’s crude can be minimised if we know exactly what we produce, what we consume locally, and export internationally; and these have occurred over the years in NEITI’s audit reports,” Adio said.
He said the current figure of crude oil production in the country is only an estimate due to poor metering system.
“ We must have our independent way of assessing what we are producing as it exists in Saudi Arabia, Kuwait, Norway, and others, who do not have the kind of challenges we have,” he said.
Also speaking, the founding Executive Director, African Centre for Leadership, Strategy, and Development (Centre LSD), Dr. Otive Igbuzor, noted that effective hydrocarbon management is hinged on the fiscal regime, regulation, and metering Infrastructure, adding that the oil and gas industry is yet to get any of the three right.
Igbuzor, also a member of the Nigeria Natural Resource Charter’s Expert Advisory Panel, said although the proposed Petroleum Industry Bill (PIB) promises to address the issues of fiscal regime and regulation, such elaborate arrangements might not be required to get metering right.
Presenting findings of a report commissioned by FOSTER in partnership with NEITI, member of the research team, Dr. Sunday Kanshio, indicated that oil firms are breaching provisions of the 1969 Petroleum Act of Nigeria, by failing to install meters at their wellhead.
He said: “There is a significant improvement in the 2016 DPR Procedure Guide for the Determination of Quantity and Quality Petroleum and Petroleum Products. There are still gaps in the DPR guidelines when benchmarked against guidelines from the countries surveyed. These gaps include measurement uncertainty, production allocation, movement of crude oil using a barge, and clarity on the measurement of refined products at refineries and jetties.”