Nigeria continues to dominate as Africa’s largest crude oil producer despite grappling with oil theft and vandalisation. The country’s proven reserves of 37.50 billion barrels and a production capacity of approximately 2.19 million barrels per day, mbpd. As of July 23, 2024, Nigr5eria’s average daily production stands at 1.61mbpd.
The Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission, Engr. Gbenga Komolafe, revealed this at the House of Representatives Special Committee’s two day public/investigative hearing on oil theft losses.
With a mandate to oversee the exploration, development, production, and lifting operations of Crude Oil and Natural Gas, the NUPRC regulates both the technical and commercial aspects of operations in the nation’s Upstream Petroleum sector, ensuring optimal tax revenue generation, royalty collection, and cost benchmarking.
Other areas of major focus for the Commission include ensuring business continuity and production sustainability at low costs, accurate measurement and timely payment of royalties, uninterrupted Crude Oil and Natural Gas supply to the domestic market and maintaining safety, health, and environmental standards.
On the statutory mandates and regulatory strategies of the NUPRC, Engr. Komolafe said the Petroleum Industry Act 2021 grants the Commission several statutory mandates in the areas of calibration and certification of metering systems and equipment, publication of reports and statistics on Upstream operations, regulatory oversight and issuance of quality and quantity certificates for exports, and determination of fiscal prices for Crude Oil and Condensate.
According to the nation’s upstream chief regulator, the strategies of the Commission aim to optimize production, enhance regulatory oversight and ensure accurate measurement and accounting.
Highlighting the key initiatives of the Commission, Engr. Gbenga Komolafe said the Commission has prioritised improving rig availability and reducing non-productive time through unlocking heavy Crude Oil reserves via industry workshops. These initiatives also support new Petroleum Prospecting License, PPL, awardees to achieve first Oil, among other initiatives.
Speaking on Crude Oil theft and pipeline vandalism, Komolafe said Nigeria is facing significant challenges, especially affecting terminals at Bonny, Brass and Forcados. This has prompted the Commission to employ end-to-end production monitoring and a mass balance methodology to accurately account for losses and differentiate them from operational losses. He noted that these interventions have significantly reduced theft, with zero incidents reported in July 2023, he stated.
On transparency and accountability, the NUPRC has introduced several innovative measures to enhance transparency and accountability.
Some of these innovations include the Advanced Cargo Declaration Regulation, ACD that ensures no Crude Oil is exported without proper accounting and assigns a unique identification number, UIN, to each cargo. Also, the Upstream Metering Regulation, which mandates reliable metering systems to account for all hydrocarbon production and exports, and real-time cargo tracking and digital documentation to improve visibility and efficiency in cargo operations.
Komolafe reaffirmed NUPRC’s commitment to continued engagement with stakeholders to optimise Nigeria’s Oil production and maintain its leadership position in Africa’s energy sector.
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