account for the millions of barrels of oil allegedly missing.
Specifically, the House said that a whopping volume of 329,420,319
barrels valued at over $20 billion could not be accounted for by the
agency between 2005 and 2012.
It added that the same trend of infractions was also observed between
2016 and 2019. Chairman of the House ad-hoc Committee on oil theft set
up to evaluate the unhealthy development with measures to stop it.
Hon. Peter Akpatason made the disclosure while meeting with the DPR. At
a resumed hearing, the lawmaker said that directive has also been given
to the DPR to give explanations on the stolen crude oil. He said, “The
effects of crude oil theft cannot be overemphasized, and this has lasted
for too long. As patriots, it is our collective responsibility to see to
the end of this stealing.
The Adhoc Committee has identified the key role DPR as the agency of
government in the sector hence your re-invitation today to enable us
work together and come up with a common front on ways to tackle this
matter if not completely put an end to it, reduce it to its barest
minimum.
“DPR is the agency of government saddled with the responsibility of
monitoring crude oil production and lifting. The Committee requested and
obtained schedules of crude oil produced and lifting between 2005 to
2019. “Forensic analysis of the data revealed a very wide margin between
what was reported produced and what was lifted. Between 2005 and 2012,
DPR reported production of 1,746,621,167 barrels from four sampled oil
terminals of Egeravos, Bonny, Forcados and Bonga. Out of this production
volumes, only 1,417,200,848 barrels were accounted for as having been
lifted officially. A whopping volume of 329,420,319 barrels, valued at
over $20 billion, could not be accounted for.
The same trend of infractions was observed in the years 2016-2019. “The
Committee through the analysis of submissions to the Committee have
raised issues requiring clarifications from DPR. These issues range from
unprocessed crude oil, suspected stolen/diverted crude oil,
discrepancies in records, use of inappropriate devices and technologies
for measurement and gauging despite huge budgetary provisions”.
Welcoming the officials earlier, Akpatason said that the mandate of the
committee was not to witch-hunt anyone but to “proffer a lasting
solution to this lingering cancer bedevilling us as a nation”.
In his remarks, the Director/Chief Executive Officer of DPR, Mr Sarki
Auwalu explained how crude oil was stolen. According to him, most of the
thefts usually come from land terminals because the land producers have
to use pipelines to transport the crude into the terminals for export.
“I will like to use this opportunity to give a brief on how we will
account for hydrocarbon in this nation. I think that will provide a
better view for this committee as well as Nigerians. The process starts
well because every crude oil comes from well, and you cannot drill a
well without knowing the capacity of that well to produce. So, the
hydrocarbon accounting in 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.
“In hydrocarbon accounting, we have static measurement and we have
dynamic measurement. The static is the volume that went into tank that
you can dip and know the volume while the dynamic is the volume that
goes across the meter. We have two kinds of meters: we have production
meter that you measure the volume of oil produced and we have custody
transfer meter where you measure the volume of oil that exchanged hands.
“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 of them. So, where is the problem? The
problem is that we have 30 terminals in Nigeria and these terminals,
five are land terminals. “Most of the thefts, they are coming from land
terminals because the land producers have to use pipelines to transport
the crude into the terminals for export. In the process, you have a lot
of third party interference in which those points of theft were there;
small volumes that account for the larger volume are being taken and
they are being stolen. “So, most of the discrepancies in 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”, Auwalu said.