There are indications that the Federal Government may increase gas flaring penalties as Nigeria races towards achieving its commitment to the United Nations’s net-zero goal by 2060.
The Chairman, Society of Petroleum Engineers, (SPE Nigeria Council), Prof. Olalekan Olafuyi, revealed this in Lagos at a pre-conference to herald its 45th yearly conference commencing from August 1 through August 3rd in Lagos.
The 2022 SPE Nigeria Annual International Conference and Exhibition is themed; ‘Global Transition to Renewable and Sustainable Energy, and the Future of Oil & Gas in Africa.’
According to him, President Mohammadu Buhari is fully committed to ensuring that Nigeria becomes a world player in the energy transition space.
He said,”We are working closely with the Nigerian Upstream Petroleum Regulatory Commission, and I can categorically say that companies which flare gas will now pay more than those utilising it. So it will be to their advantage to start thinking of ways to utilise their gas instead of flaring them”, he said, declining to state the new gas flaring rates.
Currently, companies producing more than 10, 000bpd pay a fine of $2 per 1000 Standard scf of gas flared. Companies producing less than 10, 000bpd pay a fine of $0.5 per 1000scf of gas flared.
In 2020 alone, natural gas valued at $1.24bn was flared by oil companies.
On what the society is doing to address the country’s low crude oil production, Olafuyi said it was working closely with the Nigerian Maritime Administration and Safety Agency in ensuring the safety of the pipelines.
The don said, “The society, in collaboration with the Federal Government and NIMASA, has held several meetings with stakeholders.
Another one will be held after the conference. We are also engaging the oil producing communities to see that crude oil theft which is the number one reason Nigeria has been unable to meet its OPEC quota becomes a thing of the past. As we speak, some companies have so resorted into taking their crude through barging than pipeline.
“The world is facing the challenges of balancing the urgency of transition to cleaner energy with the obvious energy deficit and economic challenges experienced in recent times. It is expected that adaptive strategies for energy transition should be adopted in Africa. This is the core of the conference”, he said.
The SPE Nigeria Council comprising Lagos, Port Harcourt, Warri, Benin and Abuja Sections is an affiliate of the SPE International, a not-for-profit professional organisation with over 140,600 members worldwide.