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Nigerian Lawmakers Vow To Recover $9bn Gas Flaring Fines Imposed on Oil Companies

DG of NOSDRA, Mr. Idris Musa, said the penalties were to serve as deterrent and recommended that the penalties should be increased.

Nigeria’s House of Representatives has vowed to recover the over $9 billion gas flaring fines imposed by the federal government on erring local and foreign oil and gas companies.

The Chairman of the Ad-hoc Committee investigating gas flaring, Hon. Ahmed Munir, stated this on Monday, in Abuja, at the investigative hearing on gas flaring from 2013-2023, by oil and gas companies in Nigeria.

The hearing was attended by stakeholders drawn from the Federal Ministry of Environment, Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), National Oil Spill Detection and Response Agency (NOSDRA), among others.

Munir stated: “I can assure you that we will not take this lying down. There are two ways to go about it, we have the issues of penalties that are not paid, amounting to about $9 billion or thereabout, that one. We know how to recover it.

“Secondly, going forward, those that are still polluting, how do you ensure you get it down to zero and what are the penalties that are going to be out in place.

“Thirdly, the big difference between then and now is, we now have a PIA in place so how do you implement it? Where we have loophole that’s why we are here to hear from the people concerned. Is there any amendment that will be required?

“If you are going to bid for oil bloc in Nigeria, and you see that out of the criteria one is your gas master plan, how do you key into that? You can’t win a bid without ensuring you’ll be able to utilise that gas or evacuate the gas responsibly.”

Also, RMAFC Chairman, Gas Monitoring Committee, Mr. Patrick Mgbebu, revealed that the gas flare penalty payment regime from 2013-2018 (2018 January-June) was $0.30.

He added that from 2018 (July-December) to 2023, it was pegged at $2.00.

According to him, the penalties payable amounted to $3,465,299,226.55 and the value of gas would have been $12,403,000,001.20 if the gas was sold and not flared.

Mgbebu, noted that the Commission compared the data from NOSDRA with the data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

He added that the following observations were made that the volume of gas flared according to NOSDRA and NUPRC were 838,667,211 Mscf and 700,975,019 Mscf respectively.

Mgbebu noted, “The difference which is 137,692,192 Mscf indicated that the Federation Account was shortchanged. It should be noted that the comparison covered three years from 2020 to 2022.

“That the value of gas flared according to NOSDRA and NUPRC are $320,583,355.48 and $43,325,050.76 respectively. As such the variance Indicated that the Federation Account was shortchanged by $277,258,304.72.”

Mgbebu stressed that while Nigeria has proven gas reserves of 201 trillion standard cubic feet and unproven gas reserves of 600 trillion standard cubic feet, production of gas remains very low and unstable.

On his part, the Director General of NOSDRA, Mr. Idris Musa, said the extant penalties on gas flaring were to serve as deterrent, but further recommended that the penalties should be increased.

He explained that a total of 3.8 billion Mscf was flared between 2013 to date, while total sum of $7.6 billion penalties are payable.

It also resolved to summon all the Chief Executive Officers of 19 oil and gas companies and others to appear before the Committee on Tuesday, 25th July, 2023.

They are: Total/Mobil JV Domestic Wing; Total/Oando JV; Total Energies; African Petroleum (AP) Plc. now Ardova PLC; Azman Oil & Gas Limited; Matrix Oil & Gas; A. M Shafa Ltd; Nigerian Electricity Regulatory Commission (NERC); National Council on Climate Change (NCCC); Nigerian Petroleum Development Company (NPDC); Yinka Folawiyo Petroleum Company (Aje Oilfield Offshore); Sterling Oil Exploration & Energy (SEEPCO); Belemaoil Production Limited; Walter Smith Petroman Oil Limited; Green Energy International Limited Millennium Oil and Gas Company Limited; Folawiyo Energy; Eroton Exploration and Production Nigeria Limited; and Niger Delta Petroleum Resources Ltd, respectively.

Earlier, while declaring the investigative hearing open, the Speaker, Hon. Abbas Tajudeen, said the task before this Ad-hoc Committee was a very critical one that lies at the heart of the health of the people and economic well-being of the nation.

Adedayo Akinwale in Abuja

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