DPR regulatory requirements for measurement uncertainty— Implications for the Petroleum Industry in Nigeria

In August 2019, the Department of Petroleum Resources (DPR) updated its petroleum measurement guidelines and included the concept of measurement uncertainty and uncertainty analysis for hydrocarbon measurement. This article presents some implications of having measurement uncertainty and uncertainty analysis in the measurement guidelines.

The department of Petroleum Resources (DPR) is the agency of government that is empowered by the Petroleum Act of 1969 to regulate the petroleum industry in Nigeria. The regulation of hydrocarbon measurement is provided in Regulation 52 of the Petroleum (Drilling and Production) Regulations of 1969. In pursuant of the extant laws, DPR has developed the “Procedure Guide for the Determination of the Quantity and Quality of Petroleum and Petroleum Products in Nigeria”—referred to here as Guidelines.  DPR updates these Guidelines from time to time to include new measurement technologies and processes. DPR published the recent update in August 2019—the new Guideline is the most comprehensive DPR has ever produced. In the new Guidelines, the DPR has categorised measurement into four classes—Class A to Class D. Interestingly, measurement uncertainty requirement for gas flow measurement has been introduced for the first time in the Guidelines. The measurement classes are presented in the table below.

Another major update in the Guidelines is the inclusion of the concept of uncertainty analysis. DPR has stated clearly in the Guidelines that the operator shall carry out an uncertainty analysis for gas metering systems within a 95% confidence level in accordance with recognised standards. The section on measurement uncertainty analysis states that the uncertainty of the metering system must be within the allowable limit even when a deviation in any of the equipment tolerance exists. This means that all the components of the measurement system must be in perfect operating condition to achieve the overall measurement uncertainty specified in the Guidelines.

Now that we have seen that DPR has introduced measurement uncertainty and uncertainty analysis into its petroleum measurement guidelines; Why is the inclusion of the concept of uncertainty and uncertainty analysis in the Guidelines important? And what are the implications for the petroleum industry in Nigeria?

The thing with measurement is that the true value of the measurement result is usually unknown—there is always a statistical doubt about the margin that exists between the result of the measurement and the true value of that measurement. For example, that it is 9 o’clock on your clock does not mean the time is truly 9 o’clock; it may be 8:59 or 9:01—it is possible that the time on the clock is an approximation. The uncertainty of measurement is defined in ISO GUM as the size of doubt about the validity of the result of a measurement. ISO GUM (The Guide to the Expression of Uncertainty in Measurement) is the document that governs the calculation of uncertainty. Although the flowmeter is the primary component of a flow measurement system, it depends on other parameters to determine the flow rate of hydrocarbon in the pipeline. Most flowmeters measure the flowrate of liquid or gas in the pipeline by inferring from the measurements of parameters such as pressure, differential pressure, temperature, density, etc. There is uncertainty in each measurement of those parameters—all the individual uncertainty in the measured parameters adds up to the overall measurement uncertainty. The measurement uncertainty of all the components of the measurement system must be obtained and combined mathematically to arrive at the overall uncertainty of the flowrate measurement.

Measurement uncertainty is essential because it is an indicator of the performance of a measurement system. This means that you can use the value of the overall measurement uncertainty of the flow to judge how the measurement systems are performing. Suppose the overall measurement uncertainty is higher than the desired value. In that case, it will mean that the measurement uncertainty of one of the components of the measurement system is contributing unusually higher uncertainty to the measurement. For example, instability in densitometer may result in higher than usual density uncertainty—which would then result in higher uncertainty in mass flow of natural gas. To arrive at the overall uncertainty specified by the regulator, uncertainty evaluation of all the contributing components of the flow measurement would be needed—this is carried out based on ISO GUM methodology.

Uncertainty of measurement and uncertainty analysis is now a requirement in the DPR hydrocarbon measurement guidelines—so what? What are the implications for the petroleum industry in Nigeria? In enumerating the implications for the industry, I have assumed that DPR will enforce the uncertainty requirements specified in the guidelines (see the above table). The implications for including the uncertainty of measurement in the guidelines are:

1. Meeting the above requirement for uncertainty would mean investing in measurement infrastructure with low uncertainty and strict adherence to the maintenance of flow meter and auxiliary instruments. For example, to meet the requirement of uncertainty for any of the measurement classes, regular meter proving, and instrument calibration is needed. Operators would have to pay attention to all the components of the flow measurement system and not the flow meter alone. 
2. Flow meters and the instruments used for measurement of all the hydrocarbon streams in the production or processing facilities must be maintained regularly to stay within the regulated uncertainty ranges. As for now, Class D measurement (especially flare gas measurement) suffers neglect from some operators—meter proving, and instrument calibration is not carried out regularly.
3. Measurement uncertainty requirements could be specified in future allocation agreements between partners using a shared pipeline to transport hydrocarbon. This would mean that partners must agree on the value of measurement uncertainty for their respective hydrocarbon streams being injected into the shared pipeline. In a shared pipeline, losses are a common phenomenon, but the allocation of the losses must be done logically and transparently to avoid a legal dispute. Some pipeline losses maybe because the measurement uncertainty of one or some of the partners’ measurement system is unacceptably high.
4. The petroleum industry in Nigeria must develop capacity in uncertainty analysis—quantification of the overall uncertainty of the applicable measurement classes. Uncertainty analysis is not straightforward and requires some level of expertise. The operators and DPR must regularly train their personnel on how to determine the overall measurement uncertainty of all the measurement classes. 

In conclusion, the incorporation of measurement uncertainty and uncertainty analysis in the DPR hydrocarbon measurement guidelines is one of the best developments in the regulation of hydrocarbon measurement in Nigeria. This development would ensue better accounting of hydrocarbon production. It will help in minimising unaccounted for hydrocarbon losses, thereby reducing disputes amount partners. This would mean additional cost to the operators as an investment would be required to upgrade some measurement system at the oil and gas production facilities. There would be a need for industry-wide capacity development with respect to the determination of overall measurement uncertainty.

The views expressed in this article are my opinion based on my understanding of the topic and does not represent those of the Department of Petroleum Resources (DPR)