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Federal Government loses N843bn to gas flaring, falling short of zero flare pledge

NOSDRA Reveals Alarming Increase in Gas Flaring, Highlighting the Toll on Finances and Climate

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New data from the National Oil Spill Detection and Response Agency (NOSDRA) exposes a staggering loss of about N843bn incurred by the Federal Government due to gas flaring between January 2022 and August 2023. The revelation, outlined in NOSDRA’s latest gas flare report, underscores a significant challenge as the government falls short of its commitment to achieving zero gas flaring by 2060.

According to the report, oil and gas companies operating in Nigeria flared 147.1 billion standard cubic feet (SCF) of gas, valued at $514.9m (about N390bn) between January and August 2022. In the same period in 2023, the flaring escalated, reaching 171.1 billion SCF of gas, valued at about $599m (N453bn). The total loss between the two periods stands at approximately N847bn.

The volume of gas flared in the first eight months of 2023 increased by 16.28%, compared to the same period in 2022. This surge not only signifies a financial setback but also raises environmental concerns. The report indicates that the flared gas in 2023 had the potential to generate 17,100 gigawatts/hour of electricity while emitting 9.1 million tons of carbon dioxide into the atmosphere.

Moreover, NOSDRA revealed that the offending companies were liable for penalties amounting to $342m (about N251bn), yet a significant portion of these penalties was never collected by the Federal Government.

Among the companies contributing to this environmental and financial dilemma are Shell Petroleum Development Company, Nigerian Petroleum Development Company, Chevron Nigeria, Mobil Oil, Elf Petroleum Nigeria, Nigeria Agip Oil Company, Addax Petroleum, Texaco Overseas (Nigeria), Cromwell, and South Atlantic Petroleum, among others.

The gas flaring occurred across various Oil Mining Leases and Oil Prospecting Licenses, including 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 OPL 222, 316, and 306.

This report surfaces at a critical juncture when the Federal Government pledged to the United Nations in 2020 to achieve zero gas flare by 2060, aligning with the UN’s 2050 target. The current revelations highlight the urgent need for enhanced measures to address the financial losses and environmental impact stemming from gas flaring in the country.

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