Former DPR, NUPRC, attributes 40% of crude losses to measurement faults, not theft

Approximately 40 percent of the volumes credited to crude losses in the Nigerian petroleum industry are attributable to measurement inaccuracies and not theft as often reported.

The Chief Executive of the Nigerian Upstream Regulatory Commission (NUPRC), Gbenga Komolafe, stated this at the Petroleum Club Quarterly Dinner, which was held in Lagos.

Komolafe said the revelation followed a forensic audit conducted by the Commission between January 2020 to November 2022 on crude theft numbers, to ascertain with accuracy the stolen volume of crude oil within the reference period.

Delivering his address on ‘Nigerian upstream petroleum sector: value optimization, energy transition and regulatory perspectives’Komolafe said the Commission is committed to dealing with the issue of metering errors by ensuring that Original Equipment Manufacturers (OEMs) licensed directly as agents of the Commission will be responsible for deployment and maintenance of metering facilities across Nigeria’s oil and gas facilities, for transparency in hydro-carbon accounting.

“The reform measure adopted by the Commission offers a paradigm shift from the trajectory in Nigeria’s hydro-carbon measurement since oil was discovered in Nigeria in Oloibiri in 1956; and is aimed at ensuring that no one becomes a judge in his own case,” he said.

He said the NURPC’s records indicate that the menace of oil theft has negatively impacted the oil and gas sector for about two decades, with attendant huge financial losses to the country.

The Chief Executive added that the Commission, in collaboration with the various arms of the Security forces, NNPC Limited and host communities, have been able to suppress the ugly trend of hydrocarbon value decimation.

“Now, our nation has continued to record good dividends of these collaborative efforts as production figures are progressively increasing.

“The January 2023 volume is approximately 1.5 million barrels per day of oil and condensates. It is expected that this number will continue to increase, as further measures are introduced and sustained to remove all illegal connections that aid crude oil theft”, he explained.

Komolafe said currently, Nigeria is flaring about 10 percent of gas produced, which the Commission is also determined to eliminate through the on-going Gas Flare Commercialization Programme (GFCP).

He said, “Nigeria produces about 8BSCF/D of gas, out of which approximately 20 percent is delivered to the domestic market, approximately 40 percent is exported to international markets, 30 percent is utilised for producer’s internal consumption and the excess gas is flared”.

Komolafe also highlighted some initiatives to enhance gas production In line with the Federal Government’s declaration of the period 2021 – 2030 as the ‘Decade of Gas’.

He noted that the Commission is taking steps to expand and develop the Nation’s huge gas resources through enhanced gas exploration, development and utilization schemes which will ultimately lead to gas reserves’ growth, increased gas production, maturation of the domestic and export gas market, as well as gas flare elimination.

The Chief Executive said following the completion of the 2020 Marginal Field Bid Round 50 Petroleum Prospecting Licenses (PPLs) were issued to deserving awardees with expectations that with the existing discoveries in the awarded fields, an early Field Development Plan (FDP) would be pursued by the awardees leading to incremental oil and gas production.

The Commission is expected to facilitate timely approvals for expedited re-entry and early production as an estimated incremental production from the awarded fields is approximately 58,000 bpd and 87mmscf/d.

Komolafe also said that the Commission is currently engaging the International Finance Corporation (IFC) on opportunities surrounding Carbon Capture Utilisation and Storage (CCUS), and the development of a national framework on CCUS, adding that such collaborative aspirations would target unlocking the huge potential Nigeria has in the Deep Play prospects, Frontier Basins and the Deep Offshore environments.

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