The Senate on Tuesday mandated the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to resume full regulatory oversight of all crude oil terminals in Nigeria. This is to curb pipeline vandalism and theft, which has resulted in Nigeria’s failure to meet its OPEC quota between January and July, this year. The major shut-in of well and fields led to lack of evacuation by the producers, particularly along the Bonny/Brass terminal network.
According to the Senate adhoc committee set up by the upper legislative chamber to investigate oil lifting, theft and the impact of petroleum production and oil revenues, Nigeria lost lost over $2 billion (about N886 billion) to oil theft between January and August, this year. The recommendation of the committee, chaired by Senator Albert Bassey Akpan, was adopted by the Senate.
NUPRC’s regulatory oversight will also cover integrated terminals, crude oil pipelines, issuance of loading clearance and processing of export permit in line with section 8(d) of the Petroleum Industry Act (PIA).
The Senate also accepted the recommendation that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) should, as provided in the PIA, concentrate fully on regulating the midstream and downstream activities. These include refineries, mid and downstream gas infrastructure, supply, storage and distribution of refined petroleum products, petrochemicals, virtual pipelines and retailing facilities, future stand-alone crude oil and natural gas export terminals.
Other recommendations endorsed by the Senate are:
- Immediate streamlining of the agencies present at the terminals in line with the relevance of their PIA delineated upstream and midstream/downstream statutory functions, while NUPRC should strengthen deployment of digital accounting procedures such as advance cargo declaration, digital integration of LACT (Lease Automatic Custody Transfer) units at all crude oil terminals for transparent hydrocarbon accounting.
- NUPRC should fast track the upgrade of the National Production Monitoring Systems (NPMS) to enable real time monitoring of flow station and terminal activities.
- NUPRC should expedite the deployment and strict enforcement of the Advance Crude Oil Cargo Declaration solution for detection and mitigation of illegal movement of vessels to ensure adequate revenue generation and optimal crude oil accounting, thus enhancing revenue generation for the federation.
- NUPRC must ensure that all vessels coming into the Nigerian waters for the purpose of crude oil liftings adhere strictly with Advance Cargo Declaration (ACD) in line with international best practices in collaboration with the Nigerian Navy and other relevant statutory agencies in line with presidential approval.
- The Ministry of Transportation should immediately withdraw its interference with Advance Cargo Declaration on wet petroleum cargoes in alignment with the statutory mandates of the NUPRC under the PIA.
- NUPRC should summarily conclude engineering audits of existing LACT Units and Flow meters for efficient regulation and monitoring for integrity assurance and standardization of crude oil measurement systems in the Nigerian upstream oil and gas operations.
- The Bureau of Public Procurement should expedite all processes of procurement for NUPRC to ensure immediate deployment of an online realtime monitoring system by the Commission across all upstream oil and gas production platforms to ensure accurate measure of production volume by the producers.
- Curtailing crude oil theft should be a collective responsibility thereby well-meaning members of the public must be encouraged to report illegal activities and transactions in stolen crude oil that may come to their knowledge from any part of the world.
- Nigeria should seek international financial collaboration to check illegal Letters of Credit used to fund the sale and purchase of Nigeria stolen crude, as such illegal crude sales can only be transacted through the world financial system.
- The Senate Committee on Petroleum Resources (Upstream) must ensure effective and periodic oversights of the upstream petroleum sector.
- The Clerk of the Senate should communicate the resolutions herein to the Honourable Minister of Petroleum Resources, Honourable Minister of State for Petroleum resources, Nigeria Upstream Petroleum Regulatory Commission, Nigerian Midstream and Downstream Petroleum Regulatory Authority, Nigerian National Petroleum Company Limited, international and indigenous operating oil companies, and other relevant agencies for immediate adoption and implementation.
The Senate adhoc committee was set up to enable the Red Chamber to determine the causes of conflict creating crises and adversely affecting the ease of doing business for oil and gas producers, with the consequential negative effects on revenue assurance.
The committee also found out that between April and September, security interventions led to the seizure and arrest of 11 crude oil vessels, 30 speed boats, 179 wooden boats, 37 trucks and 122 arrested suspects of crude oil theft.
In addition, 959 metal tanks, 737 ovens, 452 dugout pits, 342 reservoirs, and 355 cooking pots were destroyed, while 207 pumping machines, 12 sophisticated welding machines, six power generators and two automatic filling machines were recovered.
