The Federal Government of Nigeria has suffered significant financial losses due to gas flaring in the country, according to data from the National Oil Spill Detection and Response Agency (NOSDRA). Between January 2022 and August 2023, the government lost approximately N843 billion as a result of gas flaring by oil and gas companies operating in Nigeria.
The NOSDRA report reveals the following key details:
- Gas Flaring Volume: Oil and gas companies flared a substantial amount of gas during this period. Between January and August 2022, they flared 147.1 billion standard cubic feet (SCF) of gas, valued at $514.9 million (approximately N390 billion). In the same period in 2023, they flared 171.1 billion SCF of gas valued at about $599 million (approximately N453 billion).
- Total Loss: The cumulative loss from gas flaring during these eight months in both years amounted to about N843 billion. This represents a 16.28% increase in the volume of gas flared in 2023 compared to the previous year.
- Electricity Generation Potential: The gas flared in the first eight months of 2023 had the potential to generate 17,100 gigawatts/hour of electricity. However, it also resulted in emissions of 9.1 million tons of carbon dioxide into the atmosphere.
- Penalties: Oil and gas companies responsible for gas flaring incurred penalties amounting to $342 million (about N251 billion). Notably, a significant portion of these penalties was reportedly never collected by the Federal Government.
- Companies Involved: Several prominent oil and gas companies were involved in gas flaring, including Shell Petroleum, Chevron Nigeria, ExxonMobil, Nigeria Agip Oil Company, among others. Gas flaring took place across various oil blocks, including Oil Mining Leases (OMLs) and Oil Prospecting Licenses (OPLs).
This report highlights the economic and environmental challenges associated with gas flaring in Nigeria. It underscores the need for continued efforts to reduce gas flaring, both to minimize financial losses and address environmental concerns. Nigeria has committed to achieving zero gas flare by 2060 in alignment with United Nations goals, and initiatives are underway to harness associated gas for productive use and impose regulatory measures to discourage flaring.