Crude Theft: FG Authorises Online Legal Metering System

27 Nov 2012

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Tanker vessel

Chineme Okafor  

The Federal Government has mandated the Department of Weights and Measures of the Ministry of Trades and Investment to immediately commence the implementation of the Weight and Measures (Legal Metrology) Act 2004 in operations within Nigeria’s crude oil production and trading to check increasing oil theft in the country.

The initiative is expected to amongst other things ensure that sound online legal meteorology infrastructure are administered at strategic positions such as production points, well-heads, gathering facilities and export terminals,

Chief Executive Officer (CEO) of Nigerco Nigeria Ltd, Mr. Yusuf Sani, the technical consultant to the Department of Weights and Measures for the implementation of the legal meteorology system, said the measure was also initiated to subject operators in Nigeria’s oil and gas sector to standard metering methodology in view of inconsistencies in crude oil production figures.

He explained that other sectors of the Nigerian economy; telecommunication, banking, electricity and water would be covered by the new procedure, in line with provisions of the Weight and Measures Act 2004.

Sani said: “Strict adherence to principles and standard weights and measures practices are fundamental for the growth of any economy as you have noticed that inaccurate measurement system short-changes economies of revenue due to it
“In our oil and gas sector, we have seen instances of incongruent metering and measurement of crude oil production which has also meant that we have shortfalls in revenue due to the country from petroleum profit tax, royalties and other taxes that should come with true reflection of accurate metering system.”

He added: “The country’s crude oil sector has witnessed serious questions of inaccurate production figures but with the initiation of effective Weights and Measures Act and introduction of a new regime of issuance of oil and gas and other petroleum products clearance permits, we reckon that crude oil theft will be minimised going forward when the metering infrastructures are installed at strategic positions.”

He noted that the implementation of the legal meteorology had been opposed by operators in the oil and gas sector, adding that officials of the Department of Weights and Measures have been refused outright entry into crude oil terminals for inspection and meter calibration.

“Oil and gas majors will have to allow for the calibration of their metering facilities in line with standard legal measurements of the government. Activities in the upstream, midstream and downstream sectors of the industry will have to be subjected to online legal methodology starting from the wellhead to the gathering facilities which is the tank-farm and then to the export terminals to ensure that leakages in the chain are minimised,” Sani further noted.

Accordingly, Nigeria has witnessed widespread crude oil theft in recent times with the International Energy Agency (IEA), an energy policy advisor to the industrialised countries recently stating that the country lose an estimated $7 billion (N1.05 trillion) to oil theft annually.

Tags: Business, Nigeria, Featured, Crude Theft, FG, Legal Metering System

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