July 21, 2024

How Nigeria loses N1.39 Trillion to gas flaring in 2023, despite Minister’s shortage claim

By Our Reporter

One of the troubling sore points in the gas exploration is the issue of flaring. This perennial challenge came up again according to recently released data by the National Oil Spill Detection and Response Agency (NOSDRA), which hinted that Nigeria lost $1 billion, an equivalent of N1.39 trillion to gas flaring in one year, as oil and gas firms involved in oil and gas business in the country burnt 275.2 billion standard cubic feet (SCF) of gas in 2023.

In its annual gas flare report for the period under review- 2022-2023, NOSDRA stated that the volume of gas flared in 2023 was 27.03 per cent a node higher than the volume flared in 2022.

According to it, no less than 224.9 billion SCF (BSCF) of gas was flared by the oil and gas firms in 2022, priced at $787.2, which translates to N1,077 trillion, using Central Bank of Nigeria’s (CBN) exchange rate of N1,368.25 to a dollar.

According to NOSDRA , the 275.2 billion SCF of gas flared in 2023 created an alarming emissions of 14.6 million tonnes of carbon dioxide into the atmosphere; had power generation potential of 27,500 gigawatts hours (GWh), while the culpable firms susceptible to penalties of $550.4 million, an equivalent of N753.1 billion.

In 2022, the 224.9 billion SCF of gas flared had power generation potential of 22,500 GWh; was equivalent to 11.9 million tonnes of carbon dioxide emission; while the offending firms were liable of penalties of $449.8 million, about N615 billion.

Meanwhile, Nigeria continues to struggle to generate less than 5,000 megawatts a day to serve livelihoods, businesses, and the economy, due partly to limited gas supply to the Electricity Generation Companies, GENCOs.
In a breakdown of gas flared across different spectrum of petroleum industry, NOSDRA hinted that companies operating in Nogeria’s onshore oil space aggregated to 44.95 per cent of total volume flared in the year, with 123.7 billion SCF of gas.

It went on to state that the volume flared by onshore oil companies was placed at $432.8 million, about N592 billion; was capable of generating 12,400 GWh of electricity; led to the emission of 6.6 million tonnes of carbon dioxide; while the companies were liable for fines of $247.3 million, about N338 billion.

On the other hand, companies operating at oil fields offshore, accounted for 55.09 per cent of total gas flared, with 151.6 billion SCF of gas; which saw the emission of 8.1 million tonnes of carbon dioxide; was capable of generating 15,200 GWh of electricity.

The volume of gas flared by companies offshore was valued at $530.4 million (N725 billion), while the companies were liable for penalties of $303.1 million, about N414 billion.

According to NOSDRA , some of the guilty companies include Shell Petroleum, Development Company (SPDC), Nigerian Petroleum Development Company (NPDC), Chevron Nigeria, Mobil Oil, Elf Petroleum Nigeria, Nigeria Agip Oil Company (NAOC), Addax Petroleum, Texaco Overseas (Nigeria), Esso Exploration and Production Nigeria, Allied Energy Resources, Ultramar Petroleum, Atlas Petroleum; Cromwell and South Atlantic Petroleum, among others.

These companies flared gas from Oil Mining Leases (OML) 04, 05, 11, 13, 14, 17, 18, 22, 28, 23, 24, 38, 40, 42, 43, 72, 49, 54, 90, 95, 67, 70, 104, 59, 99, 100, 101, 102 and Oil Prospecting Licences 222, 316 and 306, among others.