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Nigeria may install meters at flow stations against theft
The Federal Government is considering the option of installing meters 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 meters 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 meters installed at the flow stations to
monitor the volume 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 meters 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.
