Crude oil
Oil pipeline

The Department of Petroleum Resources (DPR) on Friday defended itself against claims by the Nigeria Extractive Industries Transparency Initiative, NEITI, that no Nigerian knows the exact volume of crude oil produced in the country especially at deep offshore field.

Mr Paul Osu, Head, Public Affairs, DPR, in a statement issued in Lagos, said every litre of crude produced in the country was adequately captured during the process of extraction.

Osu said it was the responsibility of the DPR to monitor and account for crude oil production as basis for determining government’s revenue through royalty payments by operators for sustainable development.

He said: “As a further step to boosting crude accounting process from production to export, DPR recently launched the National Production Monitoring System (NPMS).

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“NPMS is an online platform for direct and independent acquisition of production data from oil and gas facilities in Nigeria.

“NPMS as an electronic data transmission tool at production and export terminals is designed to better predict the performance of oil and gas reservoirs and better production forecasting.”

According to him, the NPMS tool enables DPR to exercise surveillance, perform production monitoring and data analysis for utilisation and forecasting.

Osu said DPR as a business enabler and opportunity house would continue to develop robust and strategic initiatives to ensure timely and accurate payment of rents, royalties, and other revenues due to the government.

The Executive Secretary of NEITI, Dr Orji Ogbonnaya Orji, had earlier in the week explained that the absence of meters at wellheads and the lack of capacity to monitor deep offshore means Nigeria does not have the exact amount of crude oil produced in the country.

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He noted that NEITI has in all its oil and gas audit reports recommended that meters be placed on oil wellheads to measure the volume of crude oil produced in the country.

He explained that efforts to reform the petroleum industries have not yielded the needed results because those who benefit from the outdated oil law governing the sector have resisted the passage of the Petroleum Industry Bill, PIB.

“The only law that governs the oil and gas industry in Nigeria currently is the Petroleum Act of 1958. And if you use this law in computations of taxes and royalties based on very old rate, Nigeria losses a lot of revenue”, he stated.

He said NEITI has helped in drawing attention to this, noting that the industry has been operated through regulations, guidelines and pronouncements with no new law since 1958.

He stressed that Nigeria’s failure to update its laws in the sector means when prices go up, the country is unable to derive maximum benefit from the situation.

He pointed out the International Oil Companies, IOCs do not have interest in updating the laws because it currently favours them.


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