Oil Theft: NUPRC Kickstarts $21m Metering Audit, Advanced Cargo Declaration Projects (2024)

In a move to combat the persistent issue of crude oil theft and boost federal government revenue, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has kickstarted two key projects aimed at enhancing transparency and accountability in the upstream oil and gas sector.

The chief executive of NUPRC, Engr. Gbenga Komolafe, announced the implementation of these projects at the inauguration of the Metering Audit and Advance Cargo Declaration Project Teams, on Wednesday, in Abuja.

Recall that the Federal Executive Council (FEC) had approved a $21 million contract to audit metering and measurement equipment in the 187 oil flow stations in the country and also put in place an advance cargo declaration solution. These initiatives as earlier announced by minister of state for Petroleum Resources Heineken Lokpobiri, aims to enhance monitoring and accountability in crude oil production and distribution, addressing rampant oil theft.

Speaking during the inauguration of the project monitoring teams, Engr. Komolafe, who announced a four-month deadline for the completion of the projects, emphasised that these initiatives are in line with the Commission’s mandate to ensure optimal government revenues from upstream petroleum operations, as specified in the Petroleum Industry Act (PIA) 2021.

The projects would be executed by two firms namely: PE Energy Limited and P-Lyne Energy.

According to him, the “Audit of Upstream Measurement Equipment and Facilities” project aims to establish reliable baseline data for all measurement points, identify gaps in production and allocation measurement, and implement targeted interventions to enhance metering infrastructure.

This project is crucial in addressing issues such as the presence of obsolete equipment, lack of a comprehensive database, and absence of real-time production measurement across many locations.

He also said the “Advance Cargo Declaration Solution” complements the metering audit by establishing a robust system for declaring and tracking crude oil transportation and exports from Nigeria.

Komolafe emphasised the importance of these technologically driven initiatives in minimising waste and optimising government revenues, as mandated by the PIA.

He said the audit aims to establish reliable data for measurement points and improve production measurement, while the cargo declaration solution will enhance tracking of crude oil movements, preventing theft and ensuring accurate revenue calculations.

“This project will monitor and account for the movement of crude oil within the country, prevent disruptions, theft, and under-declaration, and ensure that only certified production is exported. It will also enable real-time tracking, reconciliation, and reporting of crude oil exports to facilitate accurate revenue billing and generation.”

“For a very long time as a nation we have suffered from the menace of crude oil theft, and there have been contentions as to the accuracy in terms of our hydrocarbon accounting in Nigeria in a manner that has impacted our federal revenue unfavourably.

So what has happened is that the commission, within its assumption of office, has been able, as a regulator, to take a very bold measure to address this issue.

“The implementation of this very important aspect of the regulation that will carry out an effective audit of the existing metering systems in 187 flow stations in Nigeria. You recall we have 31 crude oil loading terminals. So what we are trying to do is to ensure that we are able to put in place a framework where the nation will be able to accurately determine and measure the volume of crude that is loaded from these terminals.

He charged the carefully assembled teams, comprising experts from various departments within the Commission, to discharge their duties diligently and professionally.

Komolafe said the projects would be delivered within four months, and made it clear that any request to extend the timeline will not be entertained.

Engr. Komolafe expressed confidence in the successful implementation of the projects, stating his personal commitment to the initiative.

The CCE said each project has a dedicated team, led by Engr. Enorense Amadasu, executive commissioner for Development & Production, with strict timelines for completion and urged stakeholders to cooperate for successful implementation, highlighting the projects’ potential to combat illegal crude oil exports and promote transparency in the sector.

He expressed gratitude to President Bola Ahmed Tinubu and the Federal Executive Council for their support, reinforcing the Commission’s commitment to regulatory excellence and sustainable development in Nigeria’s oil and gas industry.

The NUPRC CEO also requested the cooperation of all relevant stakeholders, including the contractor, industry operators, and Commission staff, to ensure the successful implementation of the projects. He extended his gratitude to President Bola Ahmed Tinubu and the Federal Executive Council for approving the projects, which align with the Commission’s Regulatory Action Plan and ease of doing business.

Members of the team for “Audit of Upstream Measurement Equipment and Facilities in the Nigerian Oil and Gas Industry” project are as follows: Manuel Ibituroko – deputy director, Facilities Engineering & Optimization; Mohammed Sirajo – manager, Facilities Engineering; Ike Chidi – manager, Facilities Engineering; and Bashir Shariff – principal regulatory officer

For the “Advance Cargo Declaration Solution” project, the members include: Bello Shehu – assistant director, Crude Oil & Gas terminal Operations; Abdulrahman Idris – manager, Petroleum Accounting; Omeje Desmond – deputy manager, COTO PHC; Dimkpa I. H. – PRO, COTO Warri andOlatunji Babatunde – NDR.

According to the NUPRC boss, their duties shall include liaising with the Contractor to ensure the fulfilment of the Commission’s specified obligations and monitoring the implementation of the projects to ensure alignment with the scope and specifications.

Responding, one of the two contractors, chief executive officer, PE Energy Ltd, Daere Akobo, said, “We have gone through a very rigorous process in achieving two out of the key regulatory focus areas for the Commission, and that is developing a transparent approach to hydrocarbon accounting and also about continuous carbon emission monitoring.

“As a company it is our desired interest to develop a robust documenting philosophy for the Nigerian upstream industry and we will do our best, as the guidelines stipulates and the target that have been set, we will do our best to actually surpass your expectations.

Akobo also expressed optimism that with this system, Nigeria will see the benefit of process optimisation, and development of a accurate measurement framework.

On his part, director, P-Lyne Energy, Tomi Ogunwole, assured that the company will surpass the four-month deadline set by the commission.

“I am very happy that we are taking a pragmatic look at hydrocarbon accounting. It is clear that there is no way that a country can develop without proper plan and foresight, and foresight and planning also requires a lot of data. For the setting of the robust solution that will help us to account for our hydrocarbons right from the beginning to the end, and we will be able to have real-time monitoring of what transpires within the upstream sector.”

“I want to also give you the confidence of my company that we will meet and surpass the four-month deadline that you are committing to us with the support of every single person here,” Ogunwole said.

The unveiling of these innovative solutions comes at a critical time when Nigeria, Africa’s largest economy, is working to ramp up crude oil output and attract investment into its beleaguered oil industry.

The country has been grappling with supply disruptions, crude theft, and vandalism, which have hindered its ability to meet the quotas approved by the Organisation of Petroleum Exporting Countries (OPEC).

The NUPRC’s projects are expected to contribute significantly to this effort by combating oil theft and boosting government revenue.

On his part, director, P-Lyne Energy, Tomi Ogunwole, assured that the company will surpass the four-month deadline set by the commission,

“I want to also give you the confidence of my company that we will meet and surpass the four-month deadline that you are committing to us with the support of every single person here,” he said.

The unveiling of these innovative solutions comes at a critical time when Nigeria, Africa’s largest economy, is working to ramp up crude oil output and attract investment into its beleaguered oil industry.

The country has been grappling with supply disruptions, crude theft, and vandalism, which have hindered its ability to meet the quotas approved by the Organisation of Petroleum Exporting Countries (OPEC).

The NUPRC’s projects are expected to contribute significantly to this effort by combating oil theft and boosting government revenue.