FG awards $21m deal to meter 187 oil stations

Federal Executive Council has awarded a $21 million contract to install metering systems at 187 crude oil flow stations

The contract is seeking to enhancing the accuracy of production and export tracking.

The council also approved a separate contract for the implementation of a software solution that will enable the government to track and monitor the movement of Nigeria’s crude oil shipments in real-time, from the point of loading at Nigerian ports to their final destinations.

Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, announced during a press conference in Abuja that these initiatives will provide greater transparency and accuracy regarding the quantity of crude oil produced within Nigeria and the amount exported to other countries.

He said, “Two days ago, the Federal Executive Council meeting was held, presided over by Mr President, where we took some very bold steps to reorganise the oil and gas sector. One of the key approvals by the Federal Executive Council has to do with awarding a contract for the metering of our 187 flow stations across the Niger Delta region of Nigeria by the Nigerian Upstream Petroleum Regulatory Commission.

“NUPRC is the apex regulatory agency or commission for the Nigerian oil and gas upstream sector. As part of our steps to ensure that we have proper accountability, the Federal Executive Council approved the metering of all our production. We have 187 flow stations in the country, and there was a contract awarded for us to meter all the flow stations so that we’ll be able to properly account for what we produce and what we export.

“It is a major development that has never happened in this country. And this project is meant to be completed within six months, within 180 days. And it is important that Nigerians know some of the key steps that this government is taking to ensure that we maximise opportunities that other countries are getting by the availability of oil and gas in Nigeria.”

Lokpobiri pointed out that the approved cost for the deployment of the meters was $21m, adding that it would be complemented with advanced cargo tracking technology.

“The second key issue is what we call advanced cargo. As part of the steps towards ensuring that we account for what we produce, and then Nigerians get the maximum value for what we produce, the second memo that was approved by the council has to do with what we call advanced cargo.

“This means we are awarding a contract to a company that will provide the technology within 180 days, the same period, to enable us to know from the point of loading of every cargo of crude oil that’s loaded in Nigeria up to the point of destination. That’s why I call it advanced cargo.

“So if from Forcados Terminal, where crude oil is loaded, I can stay in my office and know when it is taken off from Nigeria up to the final destination. You will agree with me that most of the time you talk about the issue of oil theft. Major steps haven’t been taken. But this is the time for us to take some major steps so that we know from the beginning what we produce to the point of loading from our terminals up to the point of destination,” Lokpobiri stated.

The minister said the main objectives of those decisions were for Nigeria to ramp up crude oil production and grow its revenue from oil sales.

“Remember that oil is still the fastest way we can raise the funding we need to be able to address our economic and social problems. And so one of the steps we are taking as a government is to ensure that there is proper accountability.

“That is why this project was awarded and is to be delivered within 180 days so that we will know when a cargo is loaded, we will monitor it through digital technologies, up to when it is delivered at the final destination, and that will increase our federation revenue,” he added.

There have been concerns around crude oil production in Nigeria, as domestic refineries have repeatedly complained of being starved of crude by international oil companies.

Also, industry experts have complained about the lack of transparency in getting the actual crude oil volumes produced in the Niger Delta.

Modular refiners as well as officials of the Dangote Petroleum Refinery have repeatedly called for the provision of crude for their plants, while independent oil producers recently stated that Nigeria has to produce about two million barrels of crude daily to meet its local oil demand as well as that of export.

Nigeria currently produces less than 1.3 million barrels of crude oil daily and this is less than the 1.5 million barrels daily production quota approved for the country by the Organisation of Petroleum Exporting Countries.

But Lokpobiri stated on Friday that with the deployment of the software and metering of the 187 flow stations, the country hopes to get the actual volumes of crude produced in Nigeria, a development that would also help in the drive to ramp up crude oil production.

“The database and the control centre are dedicated to tracking our crude oil export from the point of loading to the final point of sales in any part of the world where our crude oil may be sold. Having said that, it’s also important to inform you that we’ve been able to bring back the confidence of the investing community.

“You recall that for the past 12 years, there has been no major investment in Nigeria. But since the inception of this administration, and since I was appointed as minister, we have been able to work very hard to rekindle the confidence of the investing community,” he declared.

The minister announced that the Port Harcourt refinery will become operational shortly, but did not provide a specific timeline for the commencement of refined petroleum product output.