The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has revealed that about 40 percent of the crude oil lost in the Nigerian petroleum industry is not the result of theft but is instead the result of poor measurement. Mr. Gbenga Komolafe, the Chief Executive of the NUPRC, said this in a speech at the Petroleum Club Quarterly Dinner in Lagos. According to him, this was discovered as a result of a forensic examination of oil theft statistics that the commission undertook, covering the time period from January 2020 through November 2022.
In the oil-compassed Niger Delta area of Nigeria, the number of oil thefts has gone up in recent years. The NNPC Limited’s Group Managing Director, Mele Kyari, reported in April 2022 that oil theft in 2021 cost Nigeria $4 billion, at about 200,000 barrels per day. In September, the NNPC said that oil theft was responsible for the loss of 470,000 barrels of crude oil every month, with a total value of $700 million. Revenue from oil is underperforming, according to the government’s draft fiscal policy plan for 2023–2025, because of substantial production shortfalls and shortages caused by pipeline vandalism and crude oil theft.
Oil theft is a major setback to the oil industry, which incurs losses.
For accurate and transparent hydrocarbon accounting, he said the commission would only allow Original Equipment Manufacturers (OEMs) authorized directly as contractors of the commission to install and maintain metering systems at all of Nigeria’s oil and gas installations. The commission’s proposed reformation approach is a radical departure from the trend in Nigeria’s hydrocarbon measurement, seeing as the discovery of petroleum in Nigeria was in Oloibiri in 1956; it is designed to prevent anyone from lording over it.
More so, the threat of crude oil theft is, without a doubt, a key contributor to the industry’s declining value. According to their research, oil theft has been a serious problem in the oil and gas industry, causing enormous economic losses for the country for at least the past two decades. The horrible trajectory of hydrocarbon value degradation has been suppressed; he said, through the collective efforts of the commission, NNPC Limited, the various branches of the security forces, and the local community.
Further measures taken will increase Nigeria’s oil output.
According to Mr. Komolafe, the forensic audit’s primary objective was to precisely determine the amount of crude oil stolen within the study’s time frame. As a result of everyone’s hard work, the country is starting to reap the rewards of its efforts. In January of 2023, the supply of oil and condensation is predicted to be around 1.5 million barrels per day. Further procedures are expected to be deployed and maintained to cut off all unlawful connections that facilitate crude oil theft, therefore this output is expected to rise, he said.
A difficulty that the commission is also keen to eradicate through the present Gas Flare Commercialization Programme (GFCP), according to him, is the fact that Nigeria is flaring almost 10 percent of the gas that it produces. About 8 BSCF/D of gas is produced in Nigeria; however, only about 20% of that gas is marketed on the domestic market, nearly 40% of that gas is supplied on global markets, 30% of that gas is used for the producer’s internal usage, and the remaining surplus gas is flared.
Good operational environment will be fostered with the Act.
However, the commission’s efforts are directed toward achieving the fundamental regulatory goals, as stated in Section 6 of the Petroleum Industry Act, which includes boosting Nigeria’s oil and gas reserves and output, creating a trusting environment for hydrocarbon accounting, and maximizing the industry’s effectiveness and efficiency in operations. In addition, he said, the commission is dedicated to fostering harmony and peace in the host towns in order to guarantee a favorable working environment for investors, which would have a good effect on operating costs and encourage the inflow of additional investment opportunities.
Related Link
NUPRC: Website
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Poor metering causes 40% of crude oil loss. – More than oil theft, improper measurement causes more harm to the oil industry. – Express your point of view.
The oil industry is not doing enough to ensure we meter the crude oil rate accurately. It is as a result of this we keep having oil theft.
Oil theft is the major facing the oil industry of the country and because there no much punishment vested on the people committing the crime,it keeps increasing everyday.
It is unfortunate that inadequate measurement accounts for forty percent of the crude oil that is lost in the Nigerian petroleum industry rather than theft accounting for forty percent of the loss.
This was found out as a consequence of the commission conducting a forensic investigation into the statistics about oil theft, which covered the time period of last year
It is unfortunate that, according to the draft of the government’s fiscal policy plan for the years 2023–2025, Revenue from Oil is underperforming.
Oil theft issue is different that make us lose oil now improper measurement cause loss of oil in the industry necessary step should taken to stop the lose of oil
All of Nigeria’s oil and gas installations must have metering systems installed and maintained by Original Equipment Manufacturers (OEMs) that are approved directly as contractors of the commission.
The reformation strategy that is being recommended by the commission is a significant break from the general trend in Nigeria’s hydrocarbon measuring.
It is anticipated that further measures will be implemented and maintained in order to shut off all illegal connections that assist the theft of crude oil.
In order to provide a productive setting for businesses interested in locating in the host cities, the commission is committed to promoting an atmosphere of harmony and peace there.
The theft of oil is a serious problem for the country’s oil industry, and since those responsible face few consequences, the problem is only becoming worse.
The fight against oil theft should never cease.The commission intentions to fostering harmony and peace in the host towns is great.This guarantees a favorable working environment for investors, which would have a good effect on operating costs and encourage the inflow of additional investment opportunities.
The problem of oil loss due to inaccurate measurement is something that should not be tolerated at all. Those in charge needs to be look in to and enforced a regulation that will deter and keep them awake against such mismanagement act.
The oil business isn’t doing enough to assure that we’re appropriately measuring crude oil consumption. This is the root cause of the ongoing problem of oil theft.
Poor metering causes 40% of crude oil loss. Who are this oil theft. Is because of bad government
The discovery made by Nigerian Upstream Petroleum Regulatory Commission (NUPRC) during the forensic process has really shed more light on the 40 percent of the crude oil that was lost in the Nigerian petroleum industry and has made us to know that it is not the result of theft but is instead the result of poor measurement. What a colossal mistake.
The forensic investigation carried out has made us to discovery the real situation that result to low crude oil production and has given indication that it was due to poor metering which causes 40% of crude oil loss and not oil theft as thought.
It’s a shame that poor measurement is to blame for 40% of stolen crude oil in Nigeria’s oil industry, rather than the theft itself.
The commission’s reformation strategy represents a substantial departure from Nigeria’s overall hydrocarbon measurement trend.
Unfortunately, inadequate measurement accounts for 40% of the lost crude oil in the Nigerian petroleum sector rather than theft, which would account for 40% of the loss.