Nigeria records loss of N522bn in 2019 as oil firms flare 475bn SCF of gas

Oil and gas companies operating in Nigeria flared 475.3 billion standard cubic feet, SCF, of gas in 2019, causing the country a loss of $1.7 billion, about N521.9 billion, according to data obtained from the National Oil Spill Detection and Response Agency, NOSDRA. According to the Gas Flare Tracker of NOSDRA, gas flaring was recorded in both onshore and offshore sites in the country.

The report noted that the 475.3 billion SCF of gas that was flared in the year under review, represented an equivalent of 25.2 million tonnes of carbon dioxide, C02, emissions and was capable of generating 47,500 gigawatts of electricity per hour. In addition, the NOSDRA report disclosed that the companies are liable to pay a fine of $1 billion, an equivalent of N307 billion as penalties for flaring that much quantity of gas.

Specifically, the report noted that onshore oil production sites accounted for 50.3 per cent of total gas flared in 2019, with 239 billion SCF of gas, translating to a loss of $836.4 million; CO2 emission of 12.7 million tonnes; power generation of 23,900 gigawatts per hour and the country is supposed to collect a fine of $477.9 million from the companies, an equivalent of N146.72 billion.

On the other hand, the report noted offshore oil production sites accounted for 49.7 per cent of total gas flared in 2019, with 236.4 billion SCF of gas, translating to a loss of $827.3 million, an equivalent of N253.98 billion; CO2 emission of 12.7 million tonnes; power generation of 23,900 gigawatts per hour.

The offshore firms are expected to pay a fine of $472.7 million, an equivalent of N145.12 billion as penalties for gas flaring. The N521.9 billion recorded as the amount of gas flared by the oil firms, represented 386.9 per cent or 3.9 times the N134.91 billion budgeted for the Ministry of Power in the 2020 budget and is 57.94 per cent, or more than half of the N900.77 billion budgeted for the Ministry of Defence.

The amount is also 8.8 times more than the N58.98 billion budgeted for the Ministry of Aviation; 5.2 times more than the N100.56 billion budgeted for the Ministry of Water Resources; and it represented 75.99 per cent of the N686.82 billion budgeted for the Ministry of Education. In addition, the amount of gas flared in 2019 was 3.9 times and 1.2 times more than the N133.99 billion and N441.01 billion allocated to the Ministry of Transportation and Ministry of Education respectively, in the 2020 budget.

In addition, in its Monthly Financial and Operations Report for November 2019, released recently, the NNPC noted that total gas supply for the period November 2018 to November 2019 stood at 3.080 trillion SCF out of which 467.37 billion SCF and 1.344 trillion SCF were commercialised for the domestic and export market respectively. The NNPC added that gas re-injected, fuel gas and gas flared stood at 1,269.17 billion SCF.

 

Source: Vanguard

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