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Oil Companies Fined N22mn For Flaring Gas – NOSDRA
The Federal oil and gas firms operating onshore for flaring 24 standard cubic feet of gas valued at about N40 billion ($86 million) between January and February 2023 on efforts to curb gas flaring.
In a new report by the National Oil Spill Detection and Response Agency, the FG said that companies operating onshore will pay the penalties for violating the gas flaring rule.
“Companies operating onshore flared 24.5 billion SCF of gas valued at $85.8 million, with $49 million in penalties payable,” the agency said.
The Agency’s report revealed the affected companies to include 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.Other affected companies include Mobil Producing Nigeria, Nigerian Petroleum Development Company, Addax Petroleum Limited, Famfa Oil and Elf Petroleum, among others.
Gas flaring is the surface combustion or burning of natural gas that is often associated with crude oil production when pumped up from the ground. According to NOSDRA, the current penalties for gas flaring in Nigeria officially stand at $2 per 1000 standard cubic feet (scf).
Currently, companies producing more than 10,000 barrels per day (bpd) pay a fine of $2 per 1,000 scf of gas flared, while companies producing less than 10,000 bpd pay a fine of $0.5.
The report said companies flared 19.14 billion SCF of gas in January and 14.04 billion SCF of gas in February 2023, contributing 1.3 million tonnes of carbon dioxide emission, with power generation potential of 2,500 gigawatts hours.
On the other hand, companies operating offshore flared 25.8 billion SCF of gas valued at $90m; capable of generating 2,600 gigawatts hours of electricity and had an equivalent of 1.4 million tonnes of carbon dioxide emission.
NOSDRA added that the offshore companies flared 10.84 billion SCF and 13.09 billion SCF of gas in January and February, 2023 respectively. NOSDRA did not state how much penalties offshore companies would pay for the flare.
In total, NOSDRA said 50.3 billion SCF gas was flared, amounting to about N81 billion ($176 million) lost in the months under review.The volume of gas flared in both months was 11.9 per cent lower than the 57.1 billion SCF of gas flared in the same period in 2022.
The oil spill remediation agency noted that the gas flared in the period under review was equivalent to carbon dioxide emission of 2.7 million tonnes and has power generation potential of 5,000 gigawatts hour of electricity; while the firms are liable for penalties of $101m, about N46 billion.
NOSDRA lamented that despite efforts to reduce it, gas has been flared in Nigeria since the 1950s, releasing carbon dioxide and other gaseous substances into the atmosphere, and has continuously led to environmental and health challenges in oil producing areas.