NiHMEC Pushes For Greater Expertise As Metering Inaccuracies Cause Hydrocarbon Losses

The managing partner of Fleissen Events and coordinator of the Nigeria Hydrocarbon Measurement Conference (NiHMEC) Technical Advisory Committee, Dr Sunday Kanshio, has said that accurate measurement of oil and gas is critical to maximising production, ensuring proper accounting and protecting government revenue.

This comes against the backdrop of previous reports saying that Nigeria has lost billions of dollars in revenue over the years due to faulty or inconsistent metering. According to 2023 data from the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), roughly 40 per cent of apparent crude oil losses are actually driven by metering inaccuracies and measurement deficiencies rather than physical theft.

In January 2024, NUPRC announced that fixing these measurement errors could save Nigeria an upward of $1 billion annually.

In line with this, Dr Kanshio, while speaking yesterday in Abuja ahead of NiHMEC 2026, emphasised that hydrocarbon measurement was required at various stages, from the wellhead through flow stations and pipelines to export terminals, where accurate volume accounting was essential for commercial and fiscal purposes. He further stressed that measurement was not only about determining the quantity of oil and gas produced but also about optimising production across the oil and gas industry’s value chain.

He stressed that fiscal metering at the export stage was particularly important because it provided the basis for determining government revenues, including royalties and taxes.

Kanshio also highlighted the importance of hydrocarbon accounting, saying operators must be able to determine the quantity produced by individual wells and allocate volumes where a flow station processes production from multiple fields. He explained that such allocation was necessary for fiscal purposes because royalties are calculated on field basis.

His words: “In all these phases, measurement is the most critical part. Without measurements of oil and gas quantities, it is almost like we are working blind.

“We need to know the quantity, and that requires measurement. The next phase is when the oil flows to the flow station if it is onshore or to an FPSO.”

He noted that the reliability of such measurements depended on the technology deployed and the competence of personnel responsible for operating the systems.

The NiHMEC technical advisory committee coordinator further explained that measurement remained critical when processed crude was transferred through pipelines, particularly in custody-transfer arrangements involving facilities owned by different companies.

In his own words, “the annual NiHMEC provides a platform for industry stakeholders to review progress, identify emerging challenges and develop solutions for improving hydrocarbon measurement practices.”

Kanshio added that the conference had grown into a global event, bringing together stakeholders to discuss developments, challenges and innovations in hydrocarbon measurement.