By Mary Izuaka

 

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has warned that companies awarded flare gas sites under the Nigerian Gas Flare Commercialisation Programme (NGFCP) risk having their permits revoked if they fail to utilise them.

The NUPRC Head, Media and Corporate Communications, Eniola Akinkuotu, disclosed this in a statement on Wednesday.

Mr Akinkuotu said the Commission Chief Executive, Oritsemeyiwa Eyesan, gave the warning on Tuesday during a working visit to the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, in Abuja.

Ms Eyesan said the commission had put in place a monitoring framework to track the implementation of awarded flare gas sites.

“One year after an award has been granted, the commission conducts an evaluation to determine whether there has been considerable progress.

“Where there is insufficient progress, the commission will take appropriate regulatory action, including revocation of the award where necessary,” she said.

NUPRC gave the warning amid growing concerns over the continued gas flaring by oil companies and its impact on oil-producing communities.

Gas flaring is the burning off of associated gas that comes together with oil during production. Over the years, oil companies have used the option of burning associated gas.

They have preferred flaring and paying meagre penalties to the government rather than developing infrastructure to capture the gas and make it useful. Setting up such infrastructure would be more expensive, they have argued.

In 2016, the Nigerian government launched the NGFCP to involve third-party investors or off-takers in harnessing gas released as a byproduct of oil production.

The programme was one of the government’s initiatives to drive the attainment of zero routine gas flaring by 2030 and net zero emissions by 2060 in the country.

The government said 226 companies submitted bids before the project was suspended at the onset of the COVID-19 pandemic in 2020.

In October 2022, the government announced the relaunch of the programme and opened bids.

Ms Eyesan noted that despite initial resistance from some operators, the NGFCP has continued to record progress.

According to her, 43 flare gas sites were originally identified for award, out of which 27 sites have been successfully awarded and are at various stages of implementation.

The NUPRC boss said Nigeria’s gas resources provide a strong foundation for power generation, industrialisation, exports and broader economic development.

According to her, Nigeria currently has over 215 trillion cubic feet (TCF) of proven gas reserves and an estimated total reserve base of about 600 TCF.

Progress on HCDT

Ms Eyesan also briefed the minister on the implementation of the Host Community Development Trust (HCDT) framework under the Petroleum Industry Act, PIA.

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She said the framework was introduced to address longstanding concerns in host communities and ensure petroleum resources are used for sustainable development.

According to her, the implementation of the trusts has led to significant reductions in oil theft and oil spillage, while improving relations between operators and communities.

“To date, 173 HCDTs have been incorporated, 147 have been funded, over 1,001 projects are currently ongoing, while more than 200 projects have been successfully commissioned across host communities,” she said.

In his remarks, Mr Ekpo called for a “deliberate and aggressive” implementation of the NGFCP to meet Nigeria’s 2030 target of ending routine gas flaring.

“The core objective is to add value to our gas resources by converting them into critical products and services. We must move away from environmental pollution and toward productive resource utilisation,” Mr Ekpo said.