Nigeria has the potential to produce 2.7 million as against 2.1 barrels of crude oil per day for the various security challenges, a Department of Petroleum Resources (DPR) document has revealed.
This is just as the reasons why meter are not placed on the crude oil wellheads to measure the volume of crude produced from each a day were given.
The cost implications of fixing meters and the challenges of separating water, gas and crude oil at wellheads have made it difficult for appropriate measuring instruments to put in place to measure the exact volume of crude oil produced from the onshore and offshore fields
This has been the major constraints why Nigeria is not measuring the volume of crude oil that is produced at well heads thereby creating the impression that she does not know the volume of crude oil that is being produced on daily basis.
What is produced from well heads industry analyst say is a mixture of water, gas, crude and sometime sand and this combination makes it difficult for separation to happen. The measurement is better done at the flow stations where these elements are separated.
According investigations the meter is about $500,000 while the cost of re-working the development of field is about $16 million per well. This means that works that have been done on the wells over the years would have to be readjusted on each well. The investigation revealed that if the meters had been placed on the well from when they were developed several years ago, it would have been easy to measure the volume of crude produced by each well. The total wells in the Niger Delta are about 2,800 both in onshore and offshore and reworking their developments would amount to huge against for the joint venture owners.
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They however said that some of the deep water wells have what is called mutual meters that allows for proper measurement of the volume of t crude oil that is produced.
However an official of Department of Petroleum Resources (DPR) that spoke to BusinessDay there is a system through which crude oil produced is measured with just a few merging differences.
He said the situation in which some people are saying that the country does not know the volume of crude produced is not true.
Let us assumed that there is meter to measure the crude oil, how can you separate, water, crude oil and gas at the well head, he asked.
There are 44 oil producing companies in the country and between 270 and 280 flow stations where the volume of crude oil produced by the companies are measured.
The agency says the federal government approved the renewal of 25 oil block licences and approved 16 new field development plans in 2017.
According to a report prepared by the agency, the federal government earned N748 billion from taxes and royalties paid by oil and gas companies operating in Nigeria in 2017 and $1 billion from the oil licence renewal.
“We renewed 19 expired leases in 2017 to enhance upstream investment influx and accelerate oil and gas reserves and production growth,” the report read.
“We actively supported the implementation of a major gas commercialisation programme, which seeks to create a regulatory framework to facilitate gas flare monetisation to end gas flaring by 2020.”
The agency said it issued ten licences and approval for the development of gas production and processing facilities.
The DPR said it initiated an early lease renewal programme to accelerate revenue generation for government.
It added that this was meant to fund national budget and incentivise upstream investment by ensuring the security of tenure, long gestation and payback period for oil and gas investments.
“We increased national gas reserve base from 192.07trillion cubic feet to 197.74 trillion cubic feet representing 3.5 per cent increase over the preceding year.
“We increased operator compliance on National Production Monitoring System (NPMS) by commencing the upgrade of the NPMS to real-time data captured in 26 crude oil terminal locations.
“This improved the efficiency in the administration of crude oil export and production accounting.”
