FG Fails to Recover N13.33bn Gas Flaring Fines

Reports show that the Federal Government lost N13.33 billion in income from gas flaring fines imposed on oil and gas companies in January and February 2023.

According to the National Oil Spill Detection and Response Agency's most recent gas flare statistics, firms operating onshore would face penalties for breaking the gas flaring law.

“Companies operating onshore flared 24.5 billion SCF of gas valued at $85.8m, with $49m penalties payable,” the government noted.

According to the research, businesses flared 19.14 billion SCF of gas in January and 14.04 billion SCF of gas in February 2023, generating 1.3 million tonnes of carbon dioxide emissions and 2,500 gigatonnes of electricity generation potential.

Companies working offshore, on the other hand, burned 25.8 billion SCF of gas worth $90 million, enough to generate 2,600 gigatonnes of power and emit 1.4 million tonnes of CO2.

In January and February 2023, offshore businesses burned 10.84 billion SCF and 13.09 billion SCF of gas, respectively. NOSDRA did not specify how much the fines for the flare would be.

However, according to reports, the Federal Government did not receive up to N22 billion from petrol flaring fines in January and February.

According to the Central Bank of Nigeria's quarterly data bulletin for the first quarter of 2023, the Federal Government earned N4.6 billion in January and N4.07 billion in February.

This indicates that N8.67 billion was earned between January and February 2023, leaving a N13.33 billion gap.

As part of the oil production process, gas is burned off or flared. However, the Federal Government has recently led projects in favour of gas monetization and against flaring.

The oil spill cleanup agency stated that the gas flared during the review period was comparable to 2.7 million tonnes of CO2 emissions and could generate 5,000 gigatonnes of electricity, while the companies face fines of $101 million, or N46 billion.

Shell Petroleum Development Company, which recorded gas flaring from oil mining leases 11, 13, 14, 17, 18, 22, 23, 26, 28, 30, and 39, among others; Nigerian Agip Oil Company, which reported gas flaring from OML 61, 62; and Chevron Nigeria, which recorded gas flaring from OML 49, 54, 95, among others, were among the affected companies, according to the NOSDRA report.

Mobil Producing Nigeria, Nigerian Petroleum Development Company, Addax Petroleum Limited, Famfa Oil, and Elf Petroleum are among the other firms affected.

Despite efforts to limit it, NOSDRA stated that gas has been flared in Nigeria since the 1950s, releasing carbon dioxide and other gaseous pollutants into the atmosphere and causing environmental and health problems in oil-producing areas.

Prof. Olalekan Olafuyi, Chairman of the Society of Petroleum Engineers, SPE Nigeria Council, stated that the Federal Government will enhance gas flare fines as Nigeria works towards meeting its commitment to the United Nations net zero targets by 2060.