Nigeria Crude Oil Theft Occurs at Well Heads

NNPC Headoffice

Ejiofor Alike

The Nigerian National Petroleum Corporation (NNPC) has said there was no recorded incident of crude oil theft at the export terminals, stressing that all the reported cases of crude oil theft occurred at the well-heads.

Speaking recently in Lagos during an interactive session with oil and gas operators, the Group Executive Director (GED) in charge of Exploration and Production at the NNPC, Mr. Abiye Membere, said no accounting difference between the crude oil at the export terminals and what was actually lifted had been recorded in the country.

Responding to calls by the Nigerian Extractive Industry Transparency Initiative (NEITI) that measuring meters should be installed at both the well-heads and the terminals, Membere said project economics would make this difficult if there are many oil wells in a given area.

“Anytime I complain of crude oil theft, it means from the well-heads to the terminals. That is where it actually occurs. If there is any discrepancy at the terminals, please let us know so that we go and do the audit and correct it,” he said.

He noted  there were different ways of doing measurements in the global oil and gas business, adding it would be difficult to have meters in 2,000 oil wells.

“What matters is that if you do not have a meter at the well-head, is there any other means for which you can estimate your production at the well-head to account for it either at the flow stations or at the terminals? These are other areas where metering facilities exist. So, the fact that I do not have a meter at a well-head does not mean that I cannot account for the oil. It is the job of professionals to educate those who are auditing us to ensure that they have the right parameters to do the audit,” Membere added.

“It is all over the place that we talk about metering. Please, let me say it; when we say crude oil theft, out first port of call is from the well-head to the terminal. If for any reason, there is any accounting difference between the terminals and the oil that is actually lifted, it is entirely a different issue. So, we should be able to separate this,” he said.

On claims by some of the operators that an oil block size of 100 square kilometres is very small, Membere stated that in many other oil-producing countries, the size of oil block is two by two kilometres. He charged the operators to understand all the data about a given oil block before paying signature bonus.