A Review of the Nigerian Energy Industry

DPR, NAPIMS to review crude oil handling agreement for Q3

Global oilKunle Kalejaye 17 July 2014, Sweetcrude, Lagos – The Department of Petroleum Resources, DPR, and National Petroleum Investment Management Services, NAPIMS, have concluded arrangement to review the modified formula of Crude oil Handling Agreement, CHA, before the end of the third quarter of this year.

The review became necessary following noticeable gap in the implementation of the formula that was signed on 13th March, 2013 to equitably allocate pipeline losses between operators and third parties injecting crude oil into pipeline network.

The draft modified formula tagged ‘Industry Based Theft Allocation Formula’ was presented for review on June 26, 2014 at a stakeholder’s workshop in Lagos.

Nigeria’s petroleum watch dog, DPR, said in a post on its website that another industry review of the draft modified formula is slated to hold before the end of the third Quarter of 2014.

Recall that DRP-NAPIMS joint committee was set up in December 2011 to determine whether the method of Production Accounting is in accordance with industry standard and to provide a formula for the sharing of the losses due to crude oil theft.

The committee developed a formula to determine the equitable allocation of stolen crude oil between operators and third party injectors.

The formula became necessary because of the challenges in the implementation of Crude oil Handling Agreement, CHA.

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