President Muhammadu Buhari has been asked to release details of companies flaring gas in Nigeria. The President, who doubles as the Petroleum Minister, was asked to release the names within seven days.
Nigeria’s anti-corruption group, Human and Environmental Development Agenda (HEDA Resource Centre), in a letter addressed to Buhari, said Nigeria is losing not less than $89 billion to gas flaring, describing it as a huge fund that could be harnessed to boost the country’s economy.
Gas is flared in Nigeria daily with loss to national revenue running into billions of dollars, according to observers.
Nigeria’s President, a former military ruler who was twice in charge of petroleum affairs first as Federal Minister and later as Chairman, Petroleum Trust Fund under late dictator Gen Sanni Abacha, is currently doubles as the country’s President and Minister of Petroleum Resources.
In a statement issued on Thursday, February 18, 2021, HEDA said Buhari has enormous experience in the field of petroleum exploration in the country and should immediately release the names of the culprits.
In a letter addressed to Buhari and signed by the group’s Chairman, Mr Olanrewaju Suraju, HEDA said dealing with gas flaring can save Nigeria from her floundering economic fortunes and help revive ailing infrastructures.
HEDA is requesting for the names of all the oil and gas companies flaring gas in Nigeria, the volume of gas flared by each company, the amount of penalties due to be paid for gas flared and the actual amount of penalties paid within the period. The anti-graft group said failing to release the names is a violation of Nigeria’s commitment to international convention on gas flaring.
“We call on you Mr President to release the names of companies flaring gas in Nigeria. You must do this urgently to save the country. We are losing billions of dollars to gas flaring. It’s like a huge pipe drain. No serious country will ever allow this to happen,” HEDA said.
The group regretted that the projected revenue from gas flare penalty in 2019 was N4,727,500, 000 whereas the actual revenue, as per Ministry of Finance records, was a humongous N94,088,562,903. Weak or insufficient enforcement monitoring would have resulted in the loss of N89,361,0562,903, it added.
HEDA said due to recent decline in oil revenue, the Nigerian government commenced an endless journey of obtaining loans even from potentially harmful sources.
“It has reviewed its budget, abandoned its subsidy policy and is exploring new avenues of augmenting income to fill the financial void necessitated by the economic challenges of COVID-19.”
HEDA said many positive possibilities available are not being tapped.
“One of these possibilities is the penalty statutorily imposed on oil and gas companies that continue to flare gas in Nigeria. This penalty is either not being collected as appropriate or is being under-collected with the attendant negative economic consequences to Nigeria and Nigerians,” HEDA said
Suraju said the Gas flaring Prevention of Waste and Pollution Regulations law of 2018, if well pursued and enforced can bail out Nigeria from her growing economic misfortunes.
HEDA recalled that the Associated Gas Re-Injection Act, mandatory gas flare penalties payments by the oil and gas companies were imposed including:
- U$0.50 <10,000 bopd & U$2.00 >10,000 bopd (irrespective of whether the flaring is Routine or Non–Routine Flaring … (unless in cases of war, community disturbance, insurrection, storm, etc. beyond the reasonable control of the Producer).
- An additional payment of $2.50/1000scf/d within the Oil Mining Lease or Marginal Field for each day the Producer breaches and/or fails to meet the regulations.
- In the event of continued or egregious breaches, the possibility of a) suspension of operations (curtailment of production) and/or b) termination of producer’s licence.
HEDA said: “The latest flare tracker being managed by the National Oil Spill Detection and Response Agency (NOSDRA) shows that between 2012 and 2020, Nigeria flared 1.7 billion cubic feet of gas ostensibly from the 179 flare sites. It shows further that the flared gas captured from eight locations (Abia, Akwa Ibom, Anambra, Bayelsa, Delta, Edo, Lagos and Rivers respectively) were valued at $6 billion and that if the oil companies flaring gas had paid the penalties, Nigeria could have earned $3.4 billion.”
HEDA said the Nigerian authorities initiated several actions to reaffirm its commitment to end gas flaring in all oil fields but that low enforcement regime has hampered an otherwise good policy.
“Specifically, the government ratified the Paris Climate Change Agreement and is a signatory to the Global Gas Flaring Partnership (GGFR) principles for global flare-out by 2030 whilst committing to a national flare-out target by year 2020. Unfortunately, the year 2020 has come and gone with the Nigerian government and the oil and gas companies not meeting set target. A number of reasons have been adduced for this, the most important being lack of political will and absence of enforcement of applicable laws,” said HEDA in the letter.
HEDA said it strongly believes that effective enforcement and compliance will strengthen revenue figures and induce greater development, promote clean and sustainable environment, protect livelihood of citizens of oil producing communities and entrench good governance in the country.
The group said: “It is historically imperative and politically inescapable that you must take action to debar unpatriotic actions and continued disservice to the nation by the concerned oil and gas companies and their respective functionaries. The country, more than ever before, needs to harness the full value-added potentials of its gas resources, terminate gas flare permanently and the attendant devastating environmental and human impacts it has on local communities in the Niger Delta in particular, nationally and globally as well, and augments revenues accruable to the federation account, through gas flaring penalty payments.”
HEDA said the initiative is predicated on transparency, accountability, probity, curtailment, if not complete elimination of otiose vulnerability coupled with the high level of uncertainty confronting the oil and gas sector in Nigeria and to assist in putting an end to the many haemorrhaging points in the polity so as to achieve sustainable development goals (SDG).
It said the names when released will strengthen the country’s good health and wellbeing, access to affordable, reliable, sustainable and modern energy for all, pro-climate change positioning, reduced environmental ill health and social impacts on the livelihoods of the host communities, eliminate waste of natural resources in the immediate environment and catalyse socio-economic benefits from gas flare capture, among other benefits.
