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    Home » Experts recommend metering to curb Nigeria’s oil, gas revenue loss

    Experts recommend metering to curb Nigeria’s oil, gas revenue loss

    August 10, 2021
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    Nigerian crude oil pipeline

    OpeOluwani Akintayo

    Lagos — Experts have recommended that the federal government puts in place meters at flow stations among other things as solution to combating Nigeria’s revenue loss in the oil and gas sector.

    This was agreed at a one-day sensitisation workshop organised by Civil Society Legislative Advocacy Center, CISLAC, and Oxfam Nigeria in Lagos on Tuesday.

    The hydrocarbon metering system is expected to provide the necessary data upon which Royalty and Petroleum Profit Tax, PPT are calculated.

    Speaking at one of the technical sessions, Engr. Yabagi Sani- Chairman and Chief Executive Officer, NigerCo Ltd., said Nigeria has lost billions barrels of oil due to lack of metering.

    Engr. Sani indicted the state oil company, NNPC and few government officials to being in the know of how to combat the challenges, however, saying ‘intentionally’, they have left core issues unattended to.

    “Government officials, including the NNPC and DPR know how important metering is to the oil sector because they travel abroad and see how it is being done out there, yet, they have intentionally refused to do anything about it.

    “Until today, NNPC and the DPR do not know the volume of oil at the depots, and it is a deliberate act by perpetrators of corruption in government. NNPC still uses manual measurement such as stick”, he added.

    He also faulted yearly allocations to pre-shipment companies, which according to him, do not add value to operations in the sector.

    After nearly 50 years of exploration, the oil and gas sector continues to play a significant role in the economy and accounts for 65% of total revenue to the government and more than 80 percent of Nigeria’s foreign exchange earnings. With a maximum crude oil production capacity of 2.5 million barrels per day, Nigeria is Africa’s largest producer of oil, and the 13th largest oil producing country in the world.

    The workshop is themed; ‘ Addressing Oil and Gas Revenue Loss In the Nigerian Extractive Sector: Issues, Implications and Commendations.

    A key finding in the 2009 audit of the Nigerian oil and gas industry by the Nigeria Extractive Industries Transparency Initiative, NEITI was ‘inadequacy of metering infrastructure’ in the sector.

    In 2012, the Petroleum Revenue Special Task Force, PRSTF reported the same problem. More recently, the 2017 National Petroleum Policy stated that “the state of metering and measurement of hydrocarbons was not satisfactory.”

    Executive Director, CISLAC, Auwal Ibrahim Musa said one of the consequences of the inadequacy of metering infrastructure is that Nigeria is losing revenue that could be used to fuel economic growth.

    He advised the Nigerian government to explore the diversification of its economy towards non-oil product earnings, adding that it needs to aggressively address volume-related gaps in extractive sector operations towards improving oil and gas revenue mobilisation for sustainable development financing.

    The Nigeria Extractive Industries Transparency Initiative, NEITI in its latest report with information from 98 organisations including 88 oil and gas companies, 9 government agencies and the Nigerian Liquefied Natural Gas, NLNG Company, revealed that Nigeria lost 42.25 million barrels of crude oil valued at $2.77 billion to oil theft in 2019. NEITI data also showed that between 2012 and 2015, Nigeria lost about US$9.8 billion and US$1.09 billion due to crude oil and petroleum products pipeline theft/sabotage respectively.

    Experts have recommended that the federal government puts in place meters at flow stations among other things as solution to combating Nigeria’s revenue loss in the oil and gas sector.

    This was agreed at a one-day sensitisation workshop organised by Civil Society Legislative Advocacy Center, CISLAC, and Oxfam Nigeria in Lagos on Tuesday.

    The hydrocarbon metering system is expected to provide the necessary data upon which Royalty and Petroleum Profit Tax, PPT are calculated.

    Speaking at one of the technical sessions, Engr. Yabagi Sani- Chairman and Chief Executive Officer, NigerCo Ltd., said Nigeria has lost billions barrels of oil due to lack of metering.

    Engr. Sani indicted the state oil company, NNPC and few government officials to being in the know of how to combat the challenges, however, saying ‘intentionally’, they have left core issues unattended to.

    “Government officials, including the NNPC and DPR know how important metering is to the oil sector because they travel abroad and see how it is being done out there, yet, they have intentionally refused to do anything about it.

    “Until today, NNPC and the DPR do not know the volume of oil at the depots, and it is a deliberate act by perpetrators of corruption in government. NNPC still uses manual measurement such as stick”, he added.

    He also faulted yearly allocations to pre-shipment companies, which according to him, do not add value to operations in the sector.

    After nearly 50 years of exploration, the oil and gas sector continues to play a significant role in the economy and accounts for 65% of total revenue to the government and more than 80 percent of Nigeria’s foreign exchange earnings. With a maximum crude oil production capacity of 2.5 million barrels per day, Nigeria is Africa’s largest producer of oil, and the 13th largest oil producing country in the world.

    The workshop is themed; ‘ Addressing Oil and Gas Revenue Loss In the Nigerian Extractive Sector: Issues, Implications and Commendations.

    A key finding in the 2009 audit of the Nigerian oil and gas industry by the Nigeria Extractive Industries Transparency Initiative, NEITI was ‘inadequacy of metering infrastructure’ in the sector.

    In 2012, the Petroleum Revenue Special Task Force, PRSTF reported the same problem. More recently, the 2017 National Petroleum Policy stated that “the state of metering and measurement of hydrocarbons was not satisfactory.”

    Executive Director, CISLAC, Auwal Ibrahim Musa said one of the consequences of the inadequacy of metering infrastructure is that Nigeria is losing revenue that could be used to fuel economic growth.

    He advised the Nigerian government to explore the diversification of its economy towards non-oil product earnings, adding that it needs to aggressively address volume-related gaps in extractive sector operations towards improving oil and gas revenue mobilisation for sustainable development financing.

    The Nigeria Extractive Industries Transparency Initiative, NEITI in its latest report with information from 98 organisations including 88 oil and gas companies, 9 government agencies and the Nigerian Liquefied Natural Gas, NLNG Company, revealed that Nigeria lost 42.25 million barrels of crude oil valued at $2.77 billion to oil theft in 2019. NEITI data also showed that between 2012 and 2015, Nigeria lost about US$9.8 billion and US$1.09 billion due to crude oil and petroleum products pipeline theft/sabotage respectively.

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