Nigerian gas flare reduction begins to yield positive dividends

Sep 19, 2001 02:00 AM

Concerted efforts by the Nigerian Federal Government and oil producing companies to achieve gradual reduction and final elimination of gas flare in their upstream operations by year 2008 have began to yield positive dividends. Specifically, available records on the gas operations in the upstream sector for the first half of this year showed that the percentage of gas flare had dropped to about 51 % down from the between 60-65 % profile of last year.
For instance, out of the estimated 22.374 bn cm gas production between January and May this year, only abut 11.411 bn cm, representing about 51 % of the volume produced, were flared. An estimated 10.873 bn cm were utilised.
A further decomposition of the gas utility and gas flare trend on monthly basis indicated that of the estimated 4.708 bn (166.256 bn cf) cm produced in January, 2.240 bn metres or 48 % was utilised while 52 % was flared. For February, total percentage of gas flare was 51 % or 2.089 bn cm, compared to 1.991 bn cm utilised.

Similarly, the month of march recorded a close ratio of 2.360 bn cm utilised and 2.330 bn cm flared. Estimated volume produced during the month was 4.780 bn cm. In April, about 47 % of gas produced or 2.189 bn cm was utilised compared to 2.450 bn cm, representing 53 % of total volume produced was flared.
According to available reports, an estimated gas production volume of 4.167 bn cm was recorded in May out of which about 2.093 bn cm or 50 % was flared with the balance of 2.074 bn cm utilised. For the six month period, the amount paid by oil producing companies for the volume of gas flared and violation of the Associated Gas Re-Injection Decree 1995 to government confers was N 1.67 bn at N 10 for 1,000 cf flare rate.
The Federal Government has in the last few years through the enactment of regulatory instrument including Decree 16 of 1997, 18 of 1998 and 30 of 1999 among others, continued to raise its voice against gas flare and specifically set year 2008 target for all upstream companies to end gas flare in all their operations.
For instance, apart from the policy measures, the hiking of the penalties on gas flaring from the old 10 kobo/1,000 cf to N 10 for the same volume a few years ago was intended to deter gas flaring and promote its improved utilisation in the country. Besides, its financial dividends, government's position on the need to control gas flare in the upstream operations is connected with the global campaign against ozone depletion economic activities. Nigeria, according to global reports on environmental degradation, contributes about 19 % to global warming.

The current declining gas flare trend may not be unconnected with the improved awareness being created on the utility of gas as a cheaper, and more environmental-friendly source of energy at all levels of domestic economic activities. But more specifically, analysts argue that the commitment of Exploration and Production (E&P) companies characterised by huge investment in gas re-injection project and other short term precautionary steps may be attributable to the new development which, they claim, portends a good omen for the country in its zero gas flare agenda.
While companies like ExxonMobil Nigeria and Nigeria Agip Oil company (NAOC) are taking all steps to eliminate gas flare in their operations by 2004, others including Chevron, Texaco, TotalFinaElf have said they were sure of meeting the 2008 deadline set by the government.
To achieve this, several millions of dollars are being committed to various projects by the companies as a strategic option of encouraging gas consumption and optimal utilisation of the resource at the domestic and sub-regional markets. Nigeria's estimated associated gas reserve is put at about 85 tcf while 74 tcf of non-associated gas and possibly 100 tcf of yet-to-be discovered reserves.

Source: The Guardian
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