The Federal Government announced on Monday the introduction of two key regulations aimed at halting massive oil theft in the Niger Delta and increasing the country’s revenue from crude oil production. At a stakeholders’ consultation forum in Abuja, five draft regulations were unveiled, but two— the Upstream Petroleum Measurement Regulations and the Advance Cargo Declaration Regulations—were specifically drafted to tackle oil theft. The remaining three regulations are the Significant Discovery Regulations; the Gas Flaring, Venting and Methane Emissions (Prevention of Waste and Pollution) Regulations; and the Domestic Crude Oil Supply Obligation Regulations.
The announcement was made through the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) during the third phase of its stakeholder consultation, as required by Section 216 of the Petroleum Industry Act 2021. Executive Commissioner for Economic Regulation and Strategy Planning, Kelechi Ofoegbu, explained that the measurement regulations will enable the regulator to know precisely what each upstream oil operator produces. He noted that, historically, Nigeria has struggled to reconcile production and consumption figures across the upstream, midstream, and downstream sectors. “We are not taken seriously internationally because our metrics never add up,” Ofoegbu said, adding that asking ten industry insiders for production and consumption numbers yields ten different answers. The new measurement regulations are intended to resolve this inconsistency, while the Advance Cargo Declaration Regulations will provide visibility on every vessel loading crude in Nigeria.
Ofoegbu emphasized the embarrassment of not knowing how crude is stolen even as it reaches international markets. He explained that, although some crude is refined locally in the creeks, the bulk is exported. The Advance Cargo Declaration Regulations will target the “DNA” of incoming vessels, recording their origin, registration status, loading volume, destination, refinement plans, and the quantity and quality of crude discharged.
Chief Executive of NUPRC, Gbenga Komolafe, stated that the Petroleum Industry Act created the commission to regulate upstream activities with the goal of achieving greater transparency and accountability in Nigeria’s oil sector. Represented at the forum by Executive Commissioner Habib Nuhu, Komolafe highlighted the need for standardisation of petroleum measurement systems. He noted that the commission has faced repeated criticism from the Nigeria Extractive Industries Transparency Initiative (NEITI) regarding hydrocarbon measurement and accounting. Consequently, the two new regulations are designed to upgrade and optimise the upstream hydrocarbon measurement framework, aligning it with international best practice. This enhanced framework will allow all stakeholders to have clear visibility of Nigeria’s production system—from wellheads to export terminals and final destinations.
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