Nigeria Reveals New Laws To Stop Crude Oil Theft

On Monday, the Federal Government announced the implementation of two major legislation designed to curb huge oil theft in the Niger Delta and increase the country’s revenue from crude oil output.

It revealed five draft laws at a stakeholders consultation session in Abuja, but noted that two of them – the Upstream Petroleum Measurement Regulations and the Advance Cargo Declaration Regulations – were expressly designed to combat oil theft.

The other three rules are the Significant Discovery Regulations, the Gas Flaring, Venting, and Methane Emissions (Waste and Pollution Prevention) Regulations, and the Domestic Crude Oil Supply Obligation Regulations.

The government made the announcement through the Nigerian Upstream Petroleum Regulatory Commission during the third round of its engagement with stakeholders on the drafting of rules, as required under Section 216 of the Petroleum Industry Act 2021.

The Executive Commissioner, Economic Regulation and Strategy Planning, NUPRC, Kelechi Ofoegbu, said that the measuring laws will allow the regulator to know exactly what was generated by different upstream oil businesses.

He said, “All through the years of production in this country, there’s always been the question of how much we produce and how much we consume, from upstream to midstream to downstream.

“And we say it is enough already, because we should have come to the level of maturity as a producing nation that gives us the ability of staying in a room to monitor our hydrocarbon movements.

“Every time I go to international conferences, I just came back from one of them in London today, it is the same thing that they say to me, that ‘we don’t take you guys seriously in Nigeria because your metrics never add up.’”

This, according to Ofoegbu was because “if you ask 10 individuals in the business what are your output and consumption statistics, you would get 10 different replies. So no one takes us seriously, whether we’re talking about gas flaring or something else. “I believe that is sufficient.”

He stated that the measuring requirements were expected to put an end to this problem, while the Advanced Declaration Regulations would provide visibility on any vessel arriving in Nigeria to load.

The NUPRC official said, “You know this crude theft thing; I think it is embarrassing that as a people we don’t know how our crude is stolen, yet our crude makes its way to the international markets.

“I know that a portion of it is refined locally by our brothers in the creeks, but the bulk majority ends up in the international markets and vessels come here to load.

“So this is basically supposed to target the DNA of the vessels that come in-country with the view to saying, where are you coming from, what’s your registration status, how much are you loading, what’s the destination of the crude that you’re taking, where is it going to be refined, what quantity and quality of crude, have you discharged and how much did you discharged?”

The Chief Executive, NUPRC, Gbenga Komolafe, stated the PIA created the commission to regulate the upstream business with the view to principally achieving advanced transparency and accountability in Nigeria’s oil operations

“And it is in this regard that the commission contemplates the dire need for standardisation with respect to our petroleum measurement systems,” Komolafe, who was represented by an Executive Commissioner, Habib Nuhu, stated.

He added, “Obviously we have been bashed severally by NEITI (Nigeria Extractive Industries Transparency Initiative) with respect to issues around hydrocarbon measurement and accounting systems.

“So these two regulations are principally designed to upgrade and optimise the hydrocarbon measurement framework in the upstream sector of the petroleum industry in Nigeria to align with international best practice.”

He said the regulations on hydrocarbon measurement would support Nigeria to achieve a situation where everyone could have visibility around the country’s production systems, from wellheads to export terminals and destinations.

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