Law News
Enforcement of Law on Shipment of Oil and Gas to Start in 2015
Minister of Petroleum Resources, Mrs. Diezani Alison Madueke

Minister of Petroleum Resources, Mrs. Diezani Alison Madueke

In order to safeguard and to benefit maximally from oil and gas exports from Nigeria, as well as monitor crude oil produced at any point in time, starting from the next quarter in 2015, no shipment of oil and gas will be allowed to leave the shores of this country until it fulfills all legal weights and measures requirements.

The Chairman, Chief Executive, Nigerco Nigeria Limited, and consultant to Weights and Measures arm of the Ministry of Industry, Trade and Investment, Yussuf Sani, said while addressing a cross section of the media on the need to get the crude oil measured right from the point of the wellhead that this measure would bring more income and boost the nation’s economy.

Sani said it would also assist the government to know the exact quantity of crude oil produced, sold, used, and imported.

He said: “With the dwindling oil production, coupled with the losses of over $1 billion oil revenue every month to oil theft according to the Minister of Finance, Dr. Ngozi Okonjo-Iweala, it has become necessary that starting from the 1st quarter of next year, no crude oil shipment would be allowed to leave the shores of the country until they have paid up all the requirements of Weights and Measures.”

Sani decried that between 2012 and now, all oil producers and traders, a section of Lagos Chamber of Commerce and Industry (LCCI), except only one, are owing Weight and Measure to the tune of $300 million.

“As at date, the total statutory fees owed by the oil and gas producers and exporters is USD279,335,371.20. The reluctances of the oil companies to settle their respective bills is an attempt to slow down government legal metrology implementation services in order for the operation of the industry to remain opaque.

“To institutionalise a culture of transparency, accountability and prudence in the conduct of government business, the processes of verification of equipment used for trade at export terminals and issuance of the export permit to discerning crude oil and gas exporters in the country have been streamlined and anchored on the Weight and Measures department web portal.

“Furthermore, the Federal Ministry of Industry, Trade and Investment has identified some infractions in the course of its inspection, being perpetuated by the operators of the oil and gas sector taking advantage of the inability of the federal government to address some weaknesses in the policy framework for the enforcement of the Weights and Measures and regulations.

“The challenges in this sector, however, goes beyond inaccurate measurement to the refusal of the oil companies to pay for statutory and pre-shipment exercise fees. The inability of the federal government to block some loopholes and drain pipes in the oil and gas sector which ought to have saved valuable funds that could be channeled into key projects in critical productive sectors is of great concern.”

He insisted that for the nation, as a means of cushioning the effect of the fall in the oil price on the country’s economy, there must be accurate measurement of the crude oil being produced at a particular point in time and  such measurement must be done directly from the wellhead.

This, he explained, will enable government to fight economic saboteurs and ensure that the nation generates much more income.

He said: “Wellhead is where crude oil originally come from and without measurement directly from this point, the country will not get the quantity of the oil produced, stolen, sold and used accurately. Legal metrology concerns measurements that directly affect consumers and ensures the quality and credibility of measurements that are used directly in regulation and in areas of trade.

“The legal metrology web portal is a credible and reliable database for oil and gas exports/imports data to foster proper reconciliation of revenues from oil and gas as required by the Pre-shipment Inspection Act. It is important to note that the existence of the Weight and Measure Web Portal will help to institutionalise a culture of transparency, accountability and prudence in the conduct of oil and gas business and issuance of export permit in Nigeria.”

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