Transport revenues: Nigeria

Nigeria’s 2012 EITI Oil & Gas Report identified issues with the management of oil transported via pipelines.

The Nigerian government transfers part of its share of oil production from one depot to another through pipelines. The transfers of crude oil and refined oil products to these depots are managed by the Petroleum Products Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Company (NNPC). According to the EITI Report, the method of measuring and recording refined products by PPMC is not in accordance with best practices. The systems for recording the movement through the PPMC pipelines are fragmented and outdated, and therefore subject to error. The lack of monitoring has also led to significantly reduced transfer of oil products through pipelines due to huge losses arising from defective equipment and oil theft. The report documented a loss of 529.422 million liters of Premium Motor Spirit, equivalent to over USD 220 million from one of the deposits.

Given these findings, Nigeria EITI has followed up with the government and NNPC to improve the monitoring and measuring of oil product transportation:

  • PPMC is establishing a digital measurement system for refined products for transportation. This system is already in use by various ports and depots.
  • NNPC is working with the relevant security agencies to minimise losses from oil theft. Actions include deploying a Joint Task Force and Community guards to the port offices.