Nigeria Reports Decline In Oil Theft Amid New Regulatory Efforts

The Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr. Gbenga Komolafe, has said strategies deployed to curb cases of oil theft and pipeline vandalism have started working.

A statement by the commission in Abuja, quoted the nation’s upstream chief regulator, as pointing out that the plans deployed by the NUPRC aim to optimise production, enhance regulatory oversight and ensure accurate measurement and accounting.

Komolafe spoke at a two-day public and investigative hearing on oil theft and losses organised by the House of Representatives Special Committee set up for the purpose.

Specifically, on crude oil theft and pipeline vandalism, the NUPRC chief executive said Nigeria was facing significant challenges, especially those affecting terminals at Bonny, Brass and Forcados.

This, he said, has prompted the commission to employ end-to-end production monitoring and a ‘mass balance methodology’ to accurately account for losses and differentiate them from operational losses.

These interventions, according to Komolafe, have significantly reduced theft, with zero incidents reported in July 2023, stressing that on transparency and accountability, the NUPRC has also introduced several innovative measures to enhance transparency and accountability.

“Other innovations include: The Advanced Cargo Declaration (ACD) Regulation that ensures no crude oil is exported without proper accounting and assigns a Unique Identification Number (UIN) to each cargo,” he stated.

He also mentioned the upstream metering regulation, which mandates reliable metering systems to account for all hydrocarbon production and exports, and real-time cargo tracking and digital documentation to improve visibility and efficiency in cargo operations.

He therefore reaffirmed NUPRC’s commitment to continued engagement with stakeholders to optimise Nigeria’s oil production and maintain its leadership position in Africa’s energy sector.

Highlighting other key initiatives of the commission, Komolafe said the commission has prioritised improving rig availability and reducing non-productive time through unlocking heavy crude oil reserves via industry workshops.

Among others, these initiatives, he stressed, also support the new Petroleum Prospecting License (PPL) awardees to achieve first oil.

He explained that Nigeria continues to dominate as Africa’s largest producer of crude oil, boasting proven reserves of 37.50 billion barrels and a production capacity of approximately 2.19 million barrels per day.

According to the NUPRC chief executive, as of July 23, 2024, Nigeria’s average daily production currently stands at 1.61 million bpd.

He stated that the commission has a mandate to oversee the exploration, development, production, and lifting operations of crude oil and natural gas.

He explained that the NUPRC regulates both the technical and commercial aspects of operations in the nation’s upstream petroleum sector, ensuring optimal tax revenue generation, royalty collection, and cost benchmarking.

Other areas of major focus for the commission, he said, include ensuring business continuity and production sustainability at low costs as well as accurate measurement and timely payment of royalties.

He listed others as: Uninterrupted crude oil and natural gas supply to the domestic market, maintaining safety, health, as well as environmental standards.

On the statutory mandates and regulatory strategies of the NUPRC, Komolafe said the Petroleum Industry Act (PIA) 2021 grants the commission several statutory mandates in the areas of calibration and certification of metering systems and equipment.

In addition, he said they also involve the publication of reports and statistics on upstream operations, regulatory oversight, issuance of quality and quantity certificates for exports and determination of fiscal prices for crude oil and condensate.

Emmanuel Addeh 

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