You are currently viewing Nigeria loses N150bn to gas flaring in 4 months
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Oil and gas companies operating in Nigeria flared 92.3 million standard cubic feet, mscf, of gas, worth an estimated N150 billion between January and April 2023, according to a report by the National Oil Spill Detection and Response Agency, NOSDRA.

This represents an increase of 79.5 percent against 50.3mscf of gas flared in the corresponding period of 2022.

According to the gas flare tracker obtained from NOSDRA, the 92.3mscf of gas flared in the four-month period of 2023 translated to a gas value loss of $323.1 million, about N150.08 billion (at CBN rate of N464.5 per dollar).

Consequently, the oil producing firms responsible for this flaring are expected to pay penalties amounting to $184.6 million (an equivalent of N85.7 billion) for breaching the gas flaring laws in the four-month period.  

But judging from previous flare reports the oil firms are likely to pay the penalties soon as several billions of USDollars are still outstanding against the firms’ previously recorded penalty amounts for years now.

The report also noted that the volume of gas flared in the four-month period is equivalent to 4.9 million tonnes of carbon dioxide emission and has a power generation potential of 9,200 gigawatts of electricity per hour.

On a month-on-month basis, the report noted that in January, February, March and April, 23.2 mscf, 27.1 mscf, 25.9 mscf and 16.1 mscf of gas were flared respectively.

The Petroleum Industry Act 2021 (PIA), the primary and comprehensive framework that regulates the oil and gas industry in Nigeria, signed into law by former President Muhammadu Buhari on August 16, 2021, provides a framework to regulate and gradually eliminate gas flaring in the country. Section 104 of the PIA criminalizes the act of gas flaring by any licensee, lessee or marginal field operator, except in three instances which include cases of emergency, exemption from the Nigerian Upstream Petroleum Regulatory Commission and when it is considered acceptable as a safety practice under established regulation.

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Furthermore, Section 105 of the PIA penalizes any person who is in default of Section 104. These penalties are prescribed in the Flare Gas (Prevention of Waste and Pollution) Regulations 2018 (The Regulation).

Source: Vanguard

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