26 November 2012

Nigeria: Minerals Export - N2.2 Trillion Lost to Faulty Measurement Yearly

The federal government loses about N2.2 trillion annually to inaccurate measurement system across all sectors of the economy, especially the oil and gas sector which accounts for over 80 per cent of its total revenue.

This was disclosed during a press briefing in Abuja at the weekend by the consultant to the federal government on the resuscitation of weights and measures systems in Nigeria and Chief Executive Officer of Nigerco Nig Ltd, Engr. Yabagi Sani.

Sani explained that over the years, the weights and measures department which is domiciled in the Ministry of Trade and Investment, that is responsible for ensuring accuracy in all measurement systems used in the country in line with international standards, has gone comatose. The situation, he said, has given rise to inadequate measurement system in the country resulting in the federal government being short-changed of trillions of naira, especially in the oil and gas sector.

He disclosed that whereas there was the elementary technology for multi-phase metering at the well-head to determine the quantity of oil produced, the oil majors have refused to adopt it, claiming it is too expensive.

He affirmed that at present, Nigeria's exact figure of crude production is only based on estimates as there are no internationally accepted standard of measurement, especially at the well heads.

"Multi-phase meters give you how much water, gas or water that comes out of a well-head. The technology is there but they (oil majors) choose not to use it claiming it is too expensive. Shell uses multi-phase meter in Gabon, why not in Nigeria?"

He explained that it was for the purpose of transparency and accuracy in measurement system that the Federal Executive Council (FEC), through the Ministry of Trade and Investment, contracted Nigerco as consultants in July 2012, to revive and provide technical support to Weights and Measures Department, adding that all measurement systems currently used in the oil industry are illegal because they have not been certified by the weights and measures department.

He however, disclosed that the department is facing very stiff opposition from the oil and gas sector as operators are refusing weights and measures staff from visiting their export terminals and facilities for inspection.

Meanwhile, in the face of the increasing scarcity of fuel across major cities in Nigeria, the country loses revenue of over N105 billion worth of petroleum products and crude to pipeline vandals every year across 5,120 kilometres of pipelines, LEADERSHIP gathered yesterday.

Besides, it has also been revealed that the deliberate refusal by the Independent Petroleum Marketers of Nigeria (IPMAN) and stakeholders in the chain of distribution of petroleum products in the country to continue the importation of PMS and other petroleum products in protest of non-payment of subsidy funds meant for them by the finance ministry, was also a major cause of the long queues at petrol stations across the country.

A dependable source at the Presidency told LEADERSHIP yesterday that this was the findings made by a team of investigators specially sent by the presidency to ascertain the remote cause of the fuel scarcity which is growing by the day.

The source who preferred not to be mentioned in this report, also hinted that challenges faced in fuel supply and distribution presently bedeviling the country is due to "a recent vandalisation of oil products pipeline at Arepo; where the Pipeline Products and Marketing Company (PPMC) engineers who went for repairs were shot and three of them killed. As a result of security challenges, PPMC is yet to gain access to the vandalised points to effect repairs.

"The said point is along the Atlas Cove-Mosimi line that feeds five depots and accounts for products supply to the whole of the Southwest region and also contributes to about 60 per cent of total bridging to the north", he added.

He said most worrisome is the fact that with increase in cases of crude oil theft, no culprits have been apprehended and "successfully prosecuted; except for the small time jerry can boys while the main players who use valves to siphon products with barges and with trucks are left to enjoy their loot.

"These are pertinent questions we should ask ourselves as a nation rather than blame the Nigeria National Petroleum Corporation (NNPC) or an individual", he added.

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