Gas Flaring Costs Nigeria N702 Billion as Oil Companies Burn 241 Million Standard Cubic Feet
ALTHOUGH Nigeria is experiencing a decline in revenue due to widespread oil theft, the country is still facing losses from its gas sector. In the first 11 months (January to November) of 2023, companies in Nigeria's petroleum industry flared 241.1 million standard cubic feet (MSCF) of gas, as per the latest data from the National Oil Spill Detection and Response Agency (NOSDRA).
This signifies an 18.9% rise when juxtaposed with the 195.5 million standard cubic feet (mscf) of gas flared during the same period in 2022.
NOSDRA estimated the value of the 241.1 million standard cubic feet (MSCF) flared during the mentioned period in 2023 at $843.7 million. According to the Central Bank of Nigeria's (CBN) current official exchange rate of N832.32/$, this equates to a potential revenue loss of N702.2 billion.
Additionally, NOSDRA emphasized that the companies in violation could face fines amounting to $482.1 million, equivalent to N401.3 billion.
NOSDRA further highlighted that the volume of gas flared during the reviewed period translated to carbon dioxide emissions of 673.1 thousand tonnes and had the potential to generate 24,100 gigawatt-hours (GWh) of power.
In a detailed breakdown, NOSDRA revealed that offshore operations flared 132.9 mscf, while onshore operations flared 108.1 mscf.
NOSDRA expressed regret that, despite ongoing attempts to minimize gas flaring, it has persisted in Nigeria since the 1950s, resulting in the release of carbon dioxide and other gaseous substances into the atmosphere.
This situation persists despite the House of Representatives committing to launch an investigation into the $2.5 billion annual loss attributed to gas flaring. Nevertheless, the National Assembly has yet to disclose any updates on its findings, leaving the inquiry into the flare issue unresolved for approximately three months.
In recent days, the Federal Government issued a warning to gas producers, urging them to refrain from dissuading beneficiaries of the gas flare commercialization program from undertaking their projects.
During the post-award engagement between the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and producers operating assets under the Nigerian Gas Flare Commercialisation Programme, Gbenga Komolafe, the Chief Executive of NUPRC, emphasized that the commission would not tolerate any attempts by gas producers to discourage successful awardees from pursuing their projects.
In September 2023, the federal government, via the NUPRC, issued letters of award to 42 individual companies for all 49 flare sites available.
Addressing concerns related to the decrease in flare profile volumes, Komolafe remarked, "It's worth noting that the flare volumes offered stemmed from extensive technical sessions with your teams, considering historical performance and activity-based projections. Hence, it's surprising to hear feedback from awardees claiming that some producers are casting doubt on the availability of forecasted gas volumes just a few months after the process."
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