The Federal Government, on Monday, announced the introduction of two key regulations put together to halt the massive oil theft in the Niger Delta and boost the country’s revenue from crude oil production.
It unveiled five draft regulations at a stakeholders consultation forum in Abuja, but pointed out that two of them – Upstream Petroleum Measurement Regulations, and Advance Cargo Declaration Regulations, were specifically drafted to tackle oil theft.
The other three regulations include the Significant Discovery Regulations; Gas Flaring, Venting and Methane Emissions (Prevention of waste and Pollution) Regulations; and Domestic Crude Oil Supply Obligation Regulations.
The government disclosed this through the Nigerian Upstream Petroleum Regulatory Commission, at the third phase of its consultation with stakeholders on regulations development as mandated by Section 216 of the Petroleum Industry Act 2021.
Providing insight into the regulations, the Executive Commissioner, Economic Regulation and Strategy Planning, NUPRC, Kelechi Ofoegbu, explained that the measurement regulations would give the regulator the capability of knowing exactly what was produced by different upstream oil operators.
He said, “All through the years of production in this country, there’s always been the question of how much we produce and how much we consume, from upstream to midstream to downstream.
“And we say it is enough already, because we should have come to the level of maturity as a producing nation that gives us the ability of staying in a room to monitor our hydrocarbon movements.
“Every time I go to international conferences, I just came back from one of them in London today, it is the same thing that they say to me, that ‘we don’t take you guys seriously in Nigeria because your metrics never add up.’”
This, according to Ofoegbu was because “if you ask 10 people in the industry what are your production and consumption numbers, you will get 10 different responses. So nobody takes us seriously, whether is on gas flaring, or whatever. I think that is enough already.”
He said the measurement regulations was supposed to put paid to this issue, while the Advanced Declaration Regulations would give visibility on every vessel that was coming to load in Nigeria.
The NUPRC official said, “You know this crude theft thing; I think it is embarrassing that as a people we don’t know how our crude is stolen, yet our crude makes its way to the international markets.
“I know that a portion of it is refined locally by our brothers in the creeks, but the bulk majority ends up in the international markets and vessels come here to load.
“So this is basically supposed to target the DNA of the vessels that come in-country with the view to saying, where are you coming from, what’s your registration status, how much are you loading, what’s the destination of the crude that you’re taking, where is it going to be refined, what quantity and quality of crude, have you discharged and how much did you discharged?”
The Chief Executive, NUPRC, Gbenga Komolafe, stated the PIA created the commission to regulate the upstream business with the view to principally achieving advanced transparency and accountability in Nigeria’s oil operations
“And it is in this regard that the commission contemplates the dire need for standardisation with respect to our petroleum measurement systems,” Komolafe, who was represented by an Executive Commissioner, Habib Nuhu, stated.
He added, “Obviously we have been bashed severally by NEITI (Nigeria Extractive Industries Transparency Initiative) with respect to issues around hydrocarbon measurement and accounting systems.
“So these two regulations are principally designed to upgrade and optimise the hydrocarbon measurement framework in the upstream sector of the petroleum industry in Nigeria to align with international best practice.”
He said the regulations on hydrocarbon measurement would support Nigeria to achieve a situation where everyone could have visibility around the country’s production systems, from wellheads to export terminals and destinations.
