By Yemi Olakitan
A recent research report unveiled on Monday exposes a staggering loss of an estimated $16 trillion by the Federal Government of Nigeria over the past ten years due to natural gas flaring, as outlined in the Energy Institute’s 72nd edition of the “Statistical Review of World Energy 2023.”
The breakdown of the data reveals that the nation’s upstream and downstream oil and gas companies exhibited the highest levels of gas flaring in 2012, amounting to 12.9 billion cubic meters.
Subsequently, the figures gradually diminished, reaching a low point of 5.3 billion cubic meters in 2022.
The threat of gas flaring significantly reduced to 7 billion cubic meters in 2020, and further to 6.5 billion cubic meters in 2021 before ceasing entirely in 2022.
The cumulative volume of gas flared during the ten-year period is reported at 86.5 billion cubic meters.
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Valued at $183 million per billion cubic meters, according to Hebrew Energy, the calculated loss over the specified decade amounts to $16 trillion. This alarming figure underscores the urgency to address the issue.
In response to the concerning trend, the Nigerian Upstream Petroleum Regulatory Commission took a step in October by awarding gas flaring licenses to 42 companies through the 2022 Nigerian Gas Flare Commercialization Programme auction process.
Among them, four companies were granted nine flare sites for development as clusters, while 38 companies received 40 flare sites for development as freestanding single flare sites.
Additionally, the Nigerian Oil Spill Detection and Response Agency (NOSDRA) warns that oil companies might face fines up to $25.3 million in July for gas flaring, further emphasizing the gravity of the situation.
This penalty, when converted at the current official currency rate, amounts to an equivalent of N19.4 billion.
Engr Gbenga Komolafe, Chief Executive of the Nigerian Upstream Regulatory Petroleum Commission, stressed the importance of addressing this issue not only for its environmental and health implications but also as a critical step in preventing resource waste and value erosion for the country.
He emphasized the Nigerian Gas Flare Commercialization Programme as a strategic initiative to attract investments, create a transparent market mechanism, and allocate gas flares to qualified third-party investors deploying proven technologies globally.
