The Federal Executive Council announced the award of a $21 million contract for the metering of 187 crude oil flow stations throughout Nigeria in order to accurately account for the country’s production and exports.
It further reported that the council awarded another contract for the deployment of software that would allow the government to track the movement of Nigerian crude from the point of loading to the point of destination.
This disclosure was made in a press briefing by the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, in Abuja, according to The Punch.
Lokpobiri added that the initiatives will provide greater transparency on the quantity of crude produced in the country as well as the amount sold to other countries.
He said, “Two days ago, the Federal Executive Council meeting was held, presided over by Mr President, where we took some very bold steps to reorganise the oil and gas sector. One of the key approvals by the Federal Executive Council has to do with awarding a contract for the metering of our 187 flow stations across the Niger Delta region of Nigeria by the Nigerian Upstream Petroleum Regulatory Commission.
“NUPRC is the apex regulatory agency or commission for the Nigerian oil and gas upstream sector. As part of our steps to ensure that we have proper accountability, the Federal Executive Council approved the metering of all our production. We have 187 flow stations in the country, and there was a contract awarded for us to meter all the flow stations so that we’ll be able to properly account for what we produce and what we export.
“It is a major development that has never happened in this country. And this project is meant to be completed within six months, within 180 days. And it is important that Nigerians know some of the key steps that this government is taking to ensure that we maximise opportunities that other countries are getting by the availability of oil and gas in Nigeria.”
Lokpobiri noted that the agreed cost for the deployment of the meters was $21 million, and that it will be supplemented by advanced cargo tracking equipment.
“The second key issue is what we call advanced cargo. As part of the steps towards ensuring that we account for what we produce, and then Nigerians get the maximum value for what we produce, the second memo that was approved by the council has to do with what we call advanced cargo.
“This means we are awarding a contract to a company that will provide the technology within 180 days, the same period, to enable us to know from the point of loading of every cargo of crude oil that’s loaded in Nigeria up to the point of destination. That’s why I call it advanced cargo.
“So if from Forcados Terminal, where crude oil is loaded, I can stay in my office and know when it is taken off from Nigeria up to the final destination. You will agree with me that most of the time you talk about the issue of oil theft. Major steps haven’t been taken. But this is the time for us to take some major steps so that we know from the beginning what we produce to the point of loading from our terminals up to the point of destination,” Lokpobiri stated.
The minister stated that the primary goals of these measures were for Nigeria to increase crude oil output and increase money from oil sales.
“Remember that oil is still the fastest way we can raise the funding we need to be able to address our economic and social problems. And so one of the steps we are taking as a government is to ensure that there is proper accountability.
“That is why this project was awarded and is to be delivered within 180 days so that we will know when a cargo is loaded, we will monitor it through digital technologies, up to when it is delivered at the final destination, and that will increase our federation revenue,” he added.
Concerns have been raised about crude oil production in Nigeria, with Nigerian refineries constantly complaining of being starved of petroleum by international oil companies.
Furthermore, industry experts have expressed concerns about the lack of openness in obtaining the actual crude oil amounts produced in the Niger Delta.
Nigeria currently produces less than 1.3 million barrels of crude oil per day, which is less than the Organization of Petroleum Exporting Countries’ 1.5 million barrel daily production quota.
