Several reports have consistently identified inadequate metering infrastructure of Nigeria’s oil and gas sector as a major source of huge revenue loss to the country annually. While the exact loss is undetermined, it is estimated to be in trillions of naira. Despite these disclosures the country is yet to come up with effectively enforced regulations capable of checking the revenue loss. Dr. Sunday Kanshio, lecturer at petroleum and engineering department, Baze University, Abuja, and Consultant, Hydrocarbon Metering Study, a FOSTER supported research, speaks with e360 in Abuja, on the need for the study. Excerpts
Why do you think a study on metering infrastructure in the oil sector is necessary at this time?
The study is necessary to find out the present status of metering infrastructure in the Nigerian petroleum industry. To establish whether or not the oil companies are metering hydrocarbon in accordance the Department of Petroleum Resources (DPR) guidelines and in line with international best practices. As part of the study, we are going to identify those indicators that are considered as international best practice to which we would benchmark our study.
From your preliminary findings, what is the current situation with metering infrastructure?
We are yet to visit oil fields and terminals, so, I do not know the situation at the moment
Where does the bulk stop when it comes to ensuring that meters are deployed?
It is the responsibility of the DPR to ensure that adequate metering infrastructure is deployed in the industry.
Where along the value chain, that is, from the wellhead to export terminal, do you think meters are most needed and why so?
The location where flow meters should be installed is determined by the reason for metering the hydrocarbon and the condition of the oil field. Typically, flow meters are installed downstream of the three phase separator and at the point of custody transfer. Flow meters could even be installed in the well for well performance optimization.
Apart from metering, what other scientific approach can be deployed to check revenue loss associated with oil production?
You can’t do without metering. However, composition, pressure and temperature data of the hydrocarbon streams could be very useful in estimating hydrocarbon quantities. This is called virtual metering. The techniques use mathematical models with pressure and temperature data. This method is not always used in isolation considering that it is not traceable. Virtual metering could be used for reconciliation and well performance analysis.
What do you think should be the role of citizens in helping to check the huge revenue loss?
Advocacy! The citizens must ask tough questions and demand for answers.
What methodology would the study be adopting?
We are doing desk review of hydrocarbon measurement guidelines published by DPR. We are also studying guidelines of countries with established transparency in hydrocarbon measurement such as United Kingdom, Norway and Canada. Measurement standards such as API manual of petroleum measurement standards (MPMS) are also part of the document we are studying. We would be doing interviews and field visit of export terminals.
What are the expected outcome(s)?
The study team would present a technical report of the findings to the Facility for Oil Sector Transparency (FOSTER)