Nigerian upstream oil managers have said that metering errors account for around 40% of the crude oil losses in Nigeria’s production generally attributed to oil theft, pushing up a fresh argument that the size of the menace may have been exaggerated.
A recent forensic audit on the scale of crude theft conducted by the Nigerian Upstream Regulatory Commission (NUPRC) for the period between January 2020 and November 2022, shows that 40% of the volumes thought to be lost to oil theft were actually due to inaccuracies and miscalculations.
At a recent energy event in Lagos, the NUPRC’s chief executive officer, Gbenga Komolafe, admitted that a major area of value erosion in the industry is the menace of crude oil theft.
He posited however, that the current report gathered by the forensic audit has indicated ‘areas of excellent work,’ ‘areas of more work, and areas of extra work.’
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He said his Commission is now in a position to commit energy in the right places and assignments in order to achieve results.
NUPRC will now be responsible for the deployment and maintenance of metering facilities across Nigeria’s oil and gas industry, for transparency in hydrocarbon accounting, he said.
Oil theft and pipeline vandalism have long plagued Nigeria’s upstream oil and gas industry, driving majors out of the country and often resulting in force majeure at the key crude oil export terminals.
The combination of pipeline vandalism and oil theft with a lack of investment in capacity has made Nigeria the biggest laggard in crude oil production in the OPEC+ alliance.
According to OPEC’s latest Monthly Oil Market Report (MOMR), Nigeria’s crude oil production rose by 65,000 barrels per day (bpd) in January compared to December last year—the biggest increase among all 13 OPEC members last month.
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However, the level of the crude oil output, at 1.336 million bpd in January, was well below the 1.742 million bpd quota Nigeria has as part of the OPEC+ agreement between November 2022 and December 2023.