February 6, 2023

Oil theft: FG unveils new rules on crude measurement, domestic supply

–Says current situation unacceptable

By Obas Esiedesa

THE Nigerian Upstream Petroleum Regulatory Commission, NUPRC, yesterday, began the process of enacting new regulations on how crude oil produced in the country is to be measured, as part of effort to check oil theft.

Also in the making are rules governing crude oil supply to the domestic market and regulations on advanced cargo declaration that would allow the government track crude oil export.

The NEITI has in its several oil and gas industry audit reports raised alarm that Nigeria does not know exactly the volume of crude oil produced in the country as there were no meters at oil well heads.

Speaking at the 3rd phase stakeholders consultation forum on draft regulations, the Commission Chief Executive, Engr. Gbenga Komolafe noted that for several years there have been issues around standard measurement for crude oil produced in the country, adding that the new regulation crude oil measurement will state clearly how this is carried out.

Engr. Komolafe who was represented by Executive Commissioner,, Development and Production, Dr. Habib Nuhu said the new rule “is designed to upgrade and optimize hydrocarbon measurement framework in the upstream petroleum industry in Nigeria to align to international best practices but importantly to ensure that there is absolute transparency and accountability in the way and manner we not only produce oil but also in the we handle oil to support value creation”.

He disclosed that in the third phase five new regulations are planned: Upstream Petroleum Measurement Regulations; Advance Cargo Declaration Regulations; Significant Discovery Regulations; Gas Flaring, Venting and Methane Emissions (Prevention of waste and pollutions) Regulations; and Domestic Crude Oil Supply Obligation Regulations.

The CCE disclosed that so far 13 new regulations have been established under the Petroleum Industry Act, 2021, with six already gazzetted.

Giving details of the new regulations, the Executive Commissioner, Economic Regulation and Strategic Planning, Dr. Kelechi Ofoegbu said the one thing the industry has suffered over time “has been lack of transparency and accountability. People say that our operations are masked in a haze because they don’t understand exactly what is going on.

“One of the things we have set out to do as a commission is to infuse that transparency and line of sight for everybody as mandated by the PIA. These regulations are a way of operationalising the PIA. The regulations we are bringing out today, in particular, the measurement regulation and advance cargo declaration regulation are designed to improve the transparency profile of the upstream sector.

“The measurement regulation is the regulation that will guide operators in accounting for hydrocarbons produced so that there is absolutely no confusion between what is produced and what makes its way to export terminals at the end of the day”, he added.