Nigeria produces 2.5 million barrels of crude oil every day, making it Africa’s largest producer of oil and the sixth largest oil-producing country in the world. Latest figures also show that it produces large amounts of natural gas, approximately 1.7 billion standard cubic feet (scf) per year.
The Nigerian government is responsible for the regulation of the country’s Oil & Gas Industry, and has signed up to several international conventions aimed at reducing gas flaring and conserving natural resources. Gas Flaring has technically been illegal in Nigeria since 1984 but governmental agencies have struggled to get access to the latest scientific technology to be able to effectively measure and enforce the regulations. In some cases regulatory bodies are reliant upon funding from the oil and gas companies, raising serious conflict of interest issues.
The end result is that regulation has proven unreliable in Nigeria and gas flaring has continued regardless. In a country with a hostile environment and poor working conditions, flaring still remains the cheapest and most expedient option for oil and gas producers. Even when regulations are enforced, many operators have avoided paying penalties. A recent report by the country’s Petroleum Revenue Special Task Force estimates that a total of $58 million of outstanding fines remain unpaid.
As part of a review of the industry, the task force recommended a series of new measures to reduce gas flaring and improve the recovery of fines:
- The introduction and better enforcement of a new gas flare penalty
- Independent tracking and recording or gas flaring volumes
- Tighter control of penalties to ensure timely collection of fines
- A zero gas flaring policy as part of a strategic and focused gas resources management framework
- A proper process to independently track and record gas flare figures
With Nigeria estimated to flare 14.9 billion (scf) of gas every year, at an annual loss in revenue of $166.582 million, it is hoped that these new regulations will prove to be a turning point in measuring and enforcing stricter gas flaring regulations and helping to reduce the damaging impact the practice has on the environment.