Accurate Accounting of Production Critical for Nigeria’s Oil and Gas Industry Growth – NUPRC

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has re-emphasised the importance of accurate accounting in Nigeria’s oil and gas Industry. 

This was made known by the  commission’s chief executive,  Gbenga Komolafe, in a workshop on production determination, accounting and reconciliation for crude oil, natural gas as well as condensates recently held in Abuja. 

 The Workshop according to the upstream industry regulator, was aimed at sensitising stakeholders on the statutory requirements for production verification and certification.

According to the Chief Executive, NUPRC, Mr. Gbenga Komolafe, who was represented by the Executive Commissioner, Development and Production NUPRC, Dr. Habib Nuhu, part of the reasons for the meeting was to obtain industry feedback and input on the NUPRC requirements.

Komolafe added that as the regulator of both the technical and commercial aspects of the upstream sector of the petroleum industry, it was important for the NUPRC to highlight the above to ensure optimal revenue generation for the country.

The NUPRC boss explained that the focus of the agency included business continuity and low cost of production, accurate measurement and timely payment of royalty, uninterrupted supply of crude oil and gas as well as safety of the environment.

“We understand the importance of oil and gas production to this nation, over 200 million Nigerians depend on what accrue from this production.

“So, it’s very important for every one of us to understand how to reconcile production and give proper accounting in every area from end to end across the hydrocarbons value chain,” he stated.

In his remarks, the Deputy Manager, Crude Oil Accounting, Crude Oil Terminal Operation, Abdulrahman Idris, explained that the upstream sector as defined by Section 318 of the PIA 2021 covers exploration, production and operations of crude oil and natural gas.

“Our major focus is on business continuity and low cost of production, accurate measurement and timely payment of royalty revenue security to the government.

“We also focus on uninterrupted supply of crude oil and natural gas to the domestic market for energy security of the nation, including safety, health and environment,” he said.

Idris added that the PIA 2021 also mandates the NUPRC to ensure end-to-end production accounting and certification from well head to terminal and allocates petroleum production quotas locally in conjunction with other relevant agencies of government.

According to him, section 241 of the PIA provides that there shall be a levy upon the profits of any company engaged in upstream petroleum operations in relation to crude oil and a tax to be known as hydrocarbon tax which shall be charged and assessed.

“Section 262(1) provides that subject to this Act in relation to any accounting period, all revenue of a company for that period shall be the value of any chargeable oil adjusted to the measurement points.

“This shall be based on the proceeds of chargeable oil sold by the company, and value of all chargeable oil disposed of by the company,” he stated.