FG imposes N22bn fine on oil firms over Gas Flaring

The Federal Government will impose $49m (N22bn) fine on oil and gas firms operating onshore for flaring 24b Standard Cubic Feet of gas valued at about N40b ($86m) between January and February 2023.

According to latest gas flare data by the National Oil Spill Detection and Response Agency, the 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 penalties payable,” the agency wrote.

Gas is burnt off or flared, as part of the oil production process. However, the Federal Government had in recent times led campaigns for gas monitisation as against flaring.

The Federal Government will impose $49m (N22bn) fine on oil and gas firms operating onshore for flaring 24b Standard Cubic Feet of gas valued at about N40b ($86m) between January and February 2023.

According to latest gas flare data by the National Oil Spill Detection and Response Agency, the 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 penalties payable,” the agency wrote.

Gas is burnt off or flared, as part of the oil production process. However, the Federal Government had in recent times led campaigns for gas monitisation as against flaring.

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 N46b.

The NOSDRA report identified 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.

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.

The Chairman, Society of Petroleum Engineers, SPE Nigeria Council, Prof. Olalekan Olafuyi, said the Federal Government would increase gas flare penalties as Nigeria races towards achieving its commitment to the United Nations net zero goals by 2060.