Nigeria may install metres at flow stations against theft

Feb 06, 2008 01:00 AM

The Federal Government is considering the option of installing metres at flow stations to determine the volume of crude oil that is being exported from the country.
Between 200,000 and 300,000 barrels of crude oil are stolen or unaccounted for every day, according to some estimates.

Minister of State for Petroleum, Mr Odein Ajumogobia (SAN), said the installation of metres became imperative to ensure proper monitoring of the volume of crude oil that is being exported by the country.
Following allegations that some oil-producing companies were exceeding their commercially allowable quotas (exceeding the volume of crude oil they are allowed to export), the Federal government had last year set up a committee to investigate the issue and proffer measures to be adopted to prevent such occurrences as well as ensure proper monitoring of crude production and exports quotas.

The allegation has been on since the mid-1990s and efforts by the Federal Government to get evidence have not yielded results.
To get to the root of the matter, President Umaru Musa Yar'Adua was said to have set up an office with a committee to probe the allegation. The minister, who chaired the committee, said in the course of the investigation that the team was able to review the process of monitoring from the well heads to the flow stations down to the export terminals, but could not discover any provable lapses in terms of the volume of crude being exported.

He said the committee discovered that there were some institutional lapses, at some departments, such as the Department of Petroleum Resources (DPR) that is saddled with the task of monitoring the industry, which was hampered in terms of funding, manpower and equipment.
He said prompted by this, the ministry decided to seek expert advice from Norway on how to ensure proper monitoring of the production and export quotas. Based on Norwegian experts' advice, the parties decided that it was important to have metres installed at the flow stations to monitor thevolume of crude oil being produced or exported by companies.

"The committee was set up by the president basically to monitor crude oil exports because of those speculations. And what we did eventually was to review the process of monitoring from the well head to the flow station to the terminal. We discovered that there were some lapses, some of which were institutional.”
"For instance, the DPR that has the task of monitoring the industry is hampered in terms of funding, manpower and equipment. We invited some of our counterparts in other countries, Norway, for example, to advise in terms of best practices. We came up with a blue print on the best practices although we didn't discover provable lapses in terms of the volume that is being exported.”

"What we decided was that it was important to have metres installed at the flow stations to determine or monitor volumes. And this recommendation is still with the government and hopefully very soon, we will start implementing it to improve the process of monitory," he said.
The Minister added that apart from installing electronic pump metering, there were also some proposals to have third parties to monitor volumes of export.

Meanwhile, international traders granted approval by the Crude Oil Marketing Division of the Nigerian National Petroleum Corporation to lift crude oil for 2008 are: Addax Petroleum, Arcadia, Glencore, Vitol, Trafigura, Sahara Energy, Gunvor International, Taurus Petroleum, Petrodel, J&S Limited, Oando Trading, Camac, and MRS Petroleum. Under-private refineries are: Fujairah, Pamex, Petroenergy, Lanxing, Isla and SUN.
Companies under the NNPC are: Duke Oil, Napoil, Calson and Nigermed. Under bilateral/refineries are Sinopec, Indian Oil Corporation, Tema Oil Refinery (Ghana), Ivory Coast and Senegal.

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