The Nigerian government has approved $21 million for the measurement of 187 oil flow stations across the Niger Delta region to help promote effective monitoring of the country's crude oil production and distribution.
Heineken Lokpobiri, Minister of State for Petroleum Resources (Petroleum), disclosed this at a press conference in Abuja on Friday.
Mr Lokpobiri explained that the metering project is in line with the government’s agenda to curb the problems of oil theft affecting the country’s oil and gas sector.
“One of the key decisions of the Federal Executive Council (FEC) on Wednesday concerns the award of the contract for the measurement of our 187 flow stations in the Niger Delta region of Nigeria by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). As part of our measures to ensure proper accountability, the FEC approves the measurement of all our production.
“We have 187 flow stations in the country that will be measured across the Niger Delta area, and we have been awarded a contract to measure all the flow stations so that we can properly account for what we produce and what we export.
“The cost of the contract for the survey project is approximately $21 million. This is the cost of the contract approved by the Federal Executive Council, chaired by the President, Commander-in-Chief of the Armed Forces,” Lokpobiri said.
He said this is an important development that has never happened before in the country.
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“This project is expected to be completed in six months, in 180 days. It is important for Nigerians to be aware of some of the key measures that this government is taking to ensure that we maximise the opportunities that other countries are gaining from the availability of oil and gas in Nigeria.”
Mr. Lokpobiri also revealed that the FEC has also approved the contract for advanced cargo, which will be completed within 180 days to ensure transparency and accountability in the sector.
“The second key issue is what we call forward loading. And one of the steps to ensure that we account for what we produce and that Nigerians get maximum value for what we produce, the second memorandum that was approved by the council is on what we call forward loading, which means that we are awarding a contract to a company that will provide the technology within 180 days, to enable us to know from the loading point of every cargo of crude oil that is loaded in Nigeria to the point of destination. That is why I call it forward loading,” he added.
He said that most of the time the government talks about the problem of oil theft, but no significant measures have been taken.
“This is the time to take very important steps, so that we know from the beginning what we produce, from the point of loading from our terminals to the destination point.
“This is also to ensure that the database and control centre are dedicated to tracking our crude oil exports from the point of loading to the final point of sale anywhere in the world where our crude oil can be sold,” he said.
Oil theft and pipeline vandalism are major problems affecting Nigeria's oil sector, despite repeated efforts by previous administrations to curb this menace.
In November 2023, the Nigerian National Petroleum Company Limited (NNPC Ltd) claimed that oil thieves had vandalized over 5,000 kilometers of pipelines connecting different parts of the country.
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NNPC Ltd Group Chief Executive Officer Mele Kyari, who disclosed this when he appeared before the Senate Committee on Petroleum (Downstream) on November 21, said the continued vandalisation of pipelines was causing huge loss to NNPC Ltd and described the situation as a “national calamity”.
Last December, NNPC Ltd claimed that illegal oil refineries connected 4,800 pipelines in its more than 5,000 kilometres of oil pipelines across the country.
Mr. Kyari, who disclosed this when he appeared before the Senate Appropriations Committee, lamented the rise of illegal oil pipeline connections in the Niger Delta region and other parts of the country.
“Today, there are around 4,800 illegal connections in the more than 5,000 oil pipelines that exist throughout the country.
“Illegal connections in the Niger Delta pipelines are so prevalent that within a 100-kilometre radius of the affected pipelines, 300 insertions are made in them, eventually causing the pipeline to weaken to the point where it cannot withstand the pressure of the pumped oil, let alone deliver it to the intended destination,” Kyari said.