By Abdulrahman Abdullahi
Nigeria lost an estimated N192.22bn from January to November 2020 as international oil companies and local players flared a total of 198.12 billion standard cubic feet of natural gas.
The oil companies wasted 19.95 billion scf of gas in January; 18.27 billion scf in February; 19.71 billion scf in March; 17.90 billion scf in April, and 15.07 billion scf in May, according to data obtained from the Nigerian National Petroleum Corporation.
A total of 14.19 billion scf was flared in June; 14.15 billion scf in July; 13.62 billion scf in August; 14.79 billion scf in September; 13.98 billion scf in October, 17.32 billion scf in November, and 14.17 billion scf in December.
With the price of natural gas put at $2.56 per 1,000scf as of Friday, the 198.12 billion scf flared translates to an estimated loss of $507.19m or N192.22bn (using the official exchange rate of N379/dollar).
“This implies that 70.33 per cent of the average daily gas produced was commercialised while the balance of 29.67 per cent was re-injected, used as upstream fuel gas or flared. Gas flare rate was 6.80 per cent for the month under review (i.e. 457.25 mmscfd) compared to average gas flare rate of 7.15 per cent (i.e. 538.59 mmscfd) for the period December 2019 to December 2020.”
According to the revised payment regime for gas flaring, oil firms producing 10,000 barrels of oil or more per day will pay $2 per 1,000 standard cubic feet of gas, compared to N10 per 1,000 scf in the past.
Firms producing less than 10,000 barrels of oil per day will pay a gas flare penalty of $0.5 per 1,000 scf.
