Energy - Oil & Gas - February 4, 2021

How DPR accounts for Nigeria’s crude oil production – Director

The Department of Petroleum Resources (DPR) on Thursday outlined the process and procedures it usually adopts to account for Nigeria’s crude oil production.
The agency disclosed that most incidents relating to oil theft occurs from the land terminals.
The outline was contained in a statement in Lagos by DPR’s spokesperson, Paul Osu, who quoted Director of DPR, Sarki Auwalu, following clarifications sought by members of the House of Representatives Ad-hoc Committee on Oil Theft in Abuja.
Mr Osu said Mr Auwalu told the committee chaired by Peter Akpatason, that the DPR was the agency of government saddled with the responsibility of monitoring crude oil production, lifting and export.
“I will like to use this opportunity to give a brief on how we account for hydrocarbon production in this nation.
”I think that will provide a better view for this committee as well as Nigerians. The process starts from the oil wellhead, because every crude oil comes from oil well, and you cannot drill an oil well without knowing the capacity that oil well will produce.
“So, the hydrocarbon accounting in the DPR starts from well. Once you drill a well, you will need to have what we call a maximum efficiency rate to know the capacity that well will produce. The volume accounting starts from that point,” the DPR director is quoted to have said.
He said the methodology used in hydrocarbon production accounting are both static and dynamic measurements.
The static measurement, the director said is the volume that went into tank that one can dip an instrument to know the volume, while the dynamic measurement is the volume that goes across the meter.
”We (DPR) have two kinds of meters – the production meter that you measure the volume of oil produced, and custody transfer meter where we measure the volume of oil that exchanged hands between the company and other agencies.
“What we do is to take inventory of all wells producing in every field based on the volume we give, within which that well cannot produce more than that.
“If you under-produce, you can kill the reservoir. If you over-produce, you can kill the reservoir. All these volume measurements, whether static or dynamic, we take record sof them.”
Mr Auwalu disclosed that Nigeria has over 30 oil terminals with five of them being land terminals.
“Most of the oil thefts usually come from the land terminals because the land producers have to use pipelines to transport the crude oil into the oil terminals for export.
”In the process, you have a lot of third party interferences which result in volumes that are being taken illegally or stolen.
“So, most of the discrepancies in oil production and export, you can easily calculate the theft volume.
“And the theft volume, if not all, come from the land terminals. But the offshore terminals, it is actually practically impossible to steal crude from offshore terminals, since it is from the bottom of the sea.”
In his remarks, Mr Akpatason, who is a former General Secretary of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) said the effects of crude oil theft could not be over-emphasized, particularly on the country’s economy.
He said was the responsibility of all patriotic Nigerians to put an end to the menace crude oil theft in the country.
The lawmaker said the DPR was identified as the agency playing a key role in the monitoring of crude oil production and lifting in the country hence its invitation to the agency. (NAN)

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