By Adewale Sanyaolu
To address the lingering challenge of revenue leakage in the country’s oil and gas industry, stakeholders have advocated the installation of multi-phased flow meters with remote monitoring and control systems in all onshore and offshore wellheads.
The call was contained in a communiqué issued at a day sensitisation workshop on ‘‘Addressing Oil and Gas Revenue Loss in the Nigerian Extractive Sector: Issues, Implications and Recommendations’,’ organised by Civil Society Legislative Advocacy(CISLAC) in conjunction with Oxfam in Lagos at the weekend.
The stakeholders which also included the media also maintained that modern check meters should be installed upstream of all fiscal meters at custody transfer points in the hydrocarbon flow in the oil and gas industry in Nigeria.
They argued that Nigeria has faced significant challenges in managing the oil and gas sector and maximising its revenue potential for various reasons, including the impact of the COVID-19 pandemic and the attendant fall in crude oil prices and drop in demand for petroleum products.
According to the communiqué, inadequate hydrocarbon measurement infrastructure, oil theft, spillage, corruption, gas flaring and gross mismanagement and maladministration of extractive resources have posed serious fiscal challenges to the nation.
‘‘There is no direct correlation between physical production and the financial flows because the amount of oil produced at the wellhead is not reliably known. The flow of information currently consigns the Accountant General of the Federation to a reactive role, where he is unable to exercise any effective control or authority.
There is poor collaboration among government agencies and poorly defined rules of engagement, which encourages duplication of duties and rivalry. Domestic Crude Allocation has become a main nexus of waste and revenue loss from NNPC oil sales.’’
Earlier in his opening remarks, Executive Director, CISLAC, Auwal Ibrahim Musa, said a key finding in the 2009 audit of the Nigerian oil and gas industry by the Nigeria Extractive Industries Transparency Initiative (NEITI) was ‘inadequacy of metering infrastructure’ in the sector.
‘‘In 2012, the Petroleum Revenue Special Task Force (PRSTF) reported the same problem. More recently, the 2017 National Petroleum Policy stated that “the state of metering and measurement of hydrocarbons was not satisfactory.”
The hydrocarbon metering system is expected to provide the necessary data upon which Royalty and Petroleum Profit Tax (PPT) are calculated.