The federal government has approved a contract for the construction of metering systems for all the 187 crude oil flow stations in the oil and gas industry in the country.
The flow stations metering project, estimated to cost $21 million is a major move towards reforming Nigeria’s energy sector, and curbing the high incidences of crude oil theft and accounting inefficiency thereby improving revenue generation.
Minister of state for Petroleum Resources (Oil) Heineken Lokpobiri, who made the announcement during a press briefing on Friday in Abuja, said the contract for the project was approved at the Federal Executive Council chaired by President Bola Tinubu on Monday.
Lokpobiri said that the contract awarded would be for a period of 180 days, adding that the move would enable the country meter about 187 of the flow station.
The move is coming at a time when stakeholders in the oil and gas sector had blamed faulty metering procedures, faulty instruments and lack of technology as some of the impediments to the efforts in tackling crude oil theft.
In recent times, pipelines, well heads, and flow stations have been the major targets of oil thieves in Nigeria.
Currently, there is no proper digitalised metering system to monitor and properly account for the volume of crude oil produced in the country.
Speaking on the development, Lokpobiri said that the metering would enable the government to boost crude oil production as well as increase federation revenue.
He put the cost of the contract for the metering project at about $21 million, adding that this is the first time in the history of the country where a flow station will be having a digital metering system.
He said the metering project is in line with the agenda of the government to ensure transparency and accountability in the oil and gas sector.
Lokpobiri also disclosed that another contract has also been approved to allow the government to monitor advanced cargoes to be able to track the movements of Nigeria’s crude oil.
He said the contracts which were approved by the Federal Executive Council have 180 days (six months) completion period.
“One of the key decisions of the Federal Executive Council on Wednesday has to do with the awarding of the contract for metering of our 187 flow stations across the Niger Delta region of Nigeria by the Nigerian Upstream Petroleum Regulatory Commission, NUPRC.
“As part of the reforms to ensure that we have proper accountability, the Federal Executive Council approved the metering of all our production and we have 187 flow stations in the country, littered across the Niger Delta area so that we would be able to properly account for what we produce and what we export. It’s a major, major development that has never happened in this country.
“This project is meant to be completed within six months, within 180 days. And it’s important that Nigerians know some of the key steps that this government is taking to ensure that we maximise the opportunities that other countries are getting by the availability of oil and gas”.
“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 advance cargo. Which means we’re awarding a contract to a company that will provide the technology within the 180 days, the same period, to enable us, you know, know from the point of loading of every cargo of crude oil that’s loaded in Nigeria up to the point of destination.
“So if, from Forcados terminal crude oil is loaded, I can stay in my office and know when it’s taken off from Nigeria up to the final destination. You will agree with me that most of the times we talk about the issue of oil thefts, major steps have to be taken. But this is the time for us to take very, very 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”.
He explained that the main objective from the contracts “is for us to ramp up production and improve the federation revenue.
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”.
Senator Lokpobiri said the move would provide a database on the movement of Nigeria’s crude and a tracking centre for crude oil export.
He noted that reforms put in place by the administration have increased investors’ confidence in the Nigerian environment adding that in the coming months, the government expects major investment decisions that would “amount to tens of billions of dollars.”
The Oil Minister also said the ongoing move by International Oil Companies, IOCs, to divest their onshore assets was going on smoothly, assuring that it was not unusual in any sector.
