NNPC Proposes New Deadline for Gas Flaring in Nigeria

NNPC Proposes New Deadline for Gas Flaring in Nigeria

The Nigerian National Petroleum Corporation (NNPC) has proposed December 31, 2011 as the new deadline for ending gas flaring associated with oil exploration in the country.

Sequel to the proposed new deadline, the House of Representatives Committee on Oil and Gas is now considering December 2011 as the new date to enable the corporation, which is managing the Joint Venture (JV) fields on behalf of the Federal Government, to address factors militating against the attainment of zero flare by oil and gas operators in the country.

Prior to the new deadline proposed by the NNPC, the IOCs in the country had expressed their doubts over the possibility of achieving zero flare out by the end of last year, notwithstanding the threat by the Department of Petroleum Resources (DPR) to sanction defaulters.
The initial flare-out target was set at December 31, 2008. However, although the target could not be achieved, evidence suggests that the flare out rate was reduced by about 45 per cent.
It would seem that the main obstacle to achieving a virtual elimination of gas flaring in the country is the paucity of the infrastructure needed to transmit associated gas from the oil fields to the market centres – instead of flaring it. It will take at least two years to complete a successful gas utilisation programme capable of channelling the flared gas to power stations, inter alia.

Other factors which would militate against the proposed new deadline include political instability in the region, and lack of funds for investment in the industry. With regards to the former, it is impossible to contemplate the feasibility of the new deadline while the Niger Delta region is under siege by criminal gangs and “militants” whose stock-in-trade is violence and kidnapping of oil and gas workers.

With respect to the issue of finance, the notorious delay on the part of the NNPC to fund its part of several JVs is worrisome. The NNPC is a major stakeholder in each of the gas utilisation projects needed to achieve the flare-out deadline.

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