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NEITI Laments Unremitted $559m Gas Royalty, $828m Unpaid Flare Penalty

It poses serious dangers to the global zero emissions agenda apart from huge revenue loss to the country.

The Nigeria Extractive Industries Transparency Initiative (NEITI) has raised concerns over the unremitted gas royalty payments of $559.8 million and another unpaid sum of $828.8 million gas flare penalty to the federal government.

The Executive Secretary of NEITI, Dr Ogbonnaya Orji, who also outlined the conditions while speaking as special guest at the 2nd German-Nigeria Symposium on Green Hydrogen held in Abuja, stated that more gas was flared in the country during the period it reviewed than utilised.

He explained that with the United Nations projection of Nigeria’s population to rise to over 260 million in 2030 and over 400 million in the year 2050, there was an urgent need for deliberate investments in technology, innovation, exploration, production and commercialisation of gas for Nigeria to meet the net zero target set for the year 2060.

“A breakdown of the unremitted payments in the report, showed outstanding gas royalty payments of $559.8 million and another unremitted sum of $828.8 million from unpaid gas flare penalty, confirming that more gas was flared in the country during the period than utilised,” Orji stated.

According to a statement from the organisation, the situation, he lamented, is posing serious dangers to the global zero emissions agenda apart from huge revenue loss to the country.

“Nigeria has identified natural gas as its transition fuel.  At over 200 trillion cubic feet, Nigeria has the largest gas reserves in Africa and 9th largest in the world. And with increasing new gas discoveries on the way from ongoing frontier explorations across the country, NEITI believes that gas will play a very important role in the energy transition discussion.

“As you know, gas has the potential to produce blue hydrogen, which, though not as clean as green hydrogen, would be useful in our journey towards cleaner energy sources,” Orji remarked.

The NEITI executive secretary expressed concern that at a time that gas is fast surpassing crude oil in revenue generation for resource rich countries, the rate of gas flaring with huge negative consequences on the environmental pollution was on the increase in Nigeria.

He explained that the upsurge in gas flaring and its consequent revenues loss to the country informed NEITI’s interest to support and encourage the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to fast-track the commission’s ongoing gas utilisation and commercialisation project.

On commitments to achieving a net zero emission by 2060, Orji advised that the country’s net zero pledge should include policies that will help control greenhouse gases produced in Nigeria.

He also called for major reforms in energy production and utilisation as well as concerns for energy security, jobs, livelihoods, the economy and robust citizen’s engagement, as well as deliberate investments in the expansion of gas infrastructure.

He reaffirmed NEITI’s commitment to supporting the country’s transition programme with crucial facts, reliable information, and data to guide its successful implementation and commended the objectives of the symposium.

The German Ambassador to Nigeria, Mrs Annett Gunther, in her remarks, explained that the symposium was convened by Germany as a product of discussions with the Nigerian government by the German Chancellor, Olaf Scholz.

 She stated that it was a fallout of the Chancellor’s visit to Nigeria recently as part of her country’s commitment to support Nigeria’s carbon emission reduction and diversification of her energy resources.

Also at the symposium, the Minister of State for Environment, Dr Kunle Salako, welcomed the expansion of the Nigerian German Cooperation in the areas of energy security, diversification and environmental safety.

He pledged the country’s readiness to build on the opportunities that the German Nigeria symposium on green hydrogen will provide.

The minister urged the conference to come up with far-reaching recommendations that will help shape Nigeria’s energy transition agenda.

Emmanuel Addeh in Abuja