Crude oil theft: FEC approves $21m contract for metering of 187 flow stations
The Executive Council of the Federation (FEC) has approved the award of a $21million contract for the immediate metering of all the 187 crude oil flow stations located in the Niger Delta region.
Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, who announced this during a media briefing in Abuja said the apex petroleum industry regulator, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which would award the contract, was given a six months (or 180 days) timeline to complete the project.
Lokpobiri, who described the metering contract as a bold step by the present administration to reorganize the operations of the country’s oil and gas sector to maximize the opportunities through the deployment of digital technology in oil and gas operations in the country.
The Minister said when completed the metering of the facilities would ensure transparency and proper accountability on the country’s crude oil production and exports.
Also, he spoke about the introduction of the advanced cargo arrangement meant to monitor and track the movement of crude oil consignments to give Nigerians maximal benefits from the country’s oil and gas production.
Under the arrangement, the Minister said the NUPRC was also given approval to contract a foreign firm with the technology to help determine the volume of crude oil exports from the point of loading and track the cargo to its final destination
“If a cargo of crude oil is loaded from, say the Forcados oil terminal, the technology would enable the Minister to stay in his office in Abuja to monitor and track the movement of the cargo from Nigeria to its final destination abroad,” he said.
“This is another major step by this administration to bring to an end the issue of crude oil theft, which has been responsible for the huge losses in oil export revenue by the country at the moment. This will help the government achieve the objective of ramping up the country’s oil production and raise the funding required to tackle the country’s socio-economic problems,” he added.
He said the advanced cargo arrangement would also help the country build a data base on the country’s crude oil exports to any part of the world and ensure transparency and accountability.
Reviewing the progress in the oil and gas industry, Lopkobiri said the administration has been able to rekindle the confidence of investors in the oil and gas industry with its assurance on new ways of doing business in the sector.
The new business of doing business, he pointed out, would result in major investment announcements valued at tens of billions of dollars into the country’s oil and gas sector in the next few months.
He said investments have already started coming into the country with the recent agreements between the Nigerian National Petroleum Company (NNPC) Limited and Angola for a $2.5bn project as well as another agreement by Total Energies.
On the current state of the industry, he said the major service providers in the industry, like Slumberger, which handled various contracts for oil exploration activities in the deep offshore fields, have confirmed their return to the country with the improved business climate in the country.
“This administration is committed to creating an environment in the oil and gas industry that is globally competitive to promote investments and divestments by investors at will.
He announced that as a result of the renewed confidence in the oil and gas industry, Nigeria was last Thursday awarded the hosting right of the proposed $5bn African Energy Bank by the 18 member countries of the African Petroleum Producers Organization (APPO).
The hosting right, he explained, was one of the biggest achievements of the administration as the Bank is projected to grow an asset base of $120bn, which amounts to about 30 percent of Nigeria’s gross domestic product (GDP).
“Nigeria will not disappoint the enormous confidence reposed in the country by the other APPO members. Being the highest producer of oil and gas in Africa, having operated the oil and gas business for the past 70 years, the country will always do whatever is necessary to be shining example to new oil producers in the continent,” the Minister said.
On the refineries, he said the contracts awarded by the NNPC in 2011, were at the final stages of rehabilitation
On the issue of the best point to install metering in the oil industry, the Minister said the interest of the government was to as much as possible eliminate human elements in the industry operations and replace them with digital technology, starting from the flow-stations, to ensure transparency and accountability.
On the controversy surrounding the award of OPL 245 license, which he was quoted to have said recently that all the issues have been resolved, he said media reports by Mohammed Abacha to the contrary should be ignored.
He said the government would not join issues with the Abacha family, since all oil blocks belong to the Federal Government, which has the right to award or revoke the license awarded to anybody at any time as the law allows.
“I can assure Nigerians that we have resolved all issues around OPL 245 in the overriding national interest. This matter has been going on for over the last 20 years. If I were the Abacha family, I will keep quiet, because if I were in a position to award oil licenses, I would not have awarded myself any oil license. That itself would be criminal. So, if they know what they are doing, they should just keep quiet. The oil blocks are Federation Assets. The government will do everything to ensure Nigerians benefit from them,” he declared.
