FG adjusts gas flaring revenue targets to N600bn

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The Federal Government has readjusted its revenue target from fines on gas flaring to N600 billion ($3 billion) between 2012 and 2015. The move, findings by New Telegraph revealed, is based on the accuracy of the satellite gas tracking equipment on flaring in Nigeria funded by the United Kingdom (U.K)’s Department for International Development.

The Federal Government had earlier raised gas flaring penalty to $3.50 for a million standard cubic feet per day. A source at the ministry of environment said that the new target based on the new penalty figure, shows that Nigeria is getting better results in terms of gas flaring.

“The satellite gas tracking equipment and the fine are not to boost revenues but to discourage gas flaring in Nigeria,” a source at the ministry of environment said. “To start with, the satellite tracking showed that $2 billion fines are expected to be slammed on erring oil companies over gas flaring in Nigeria’s oil rich region between January 2012 and January 2014,” he said.Besides, the source said: “An extension of this to 2015 means that government is to get $3 billion ($600 billion) cumulative revenues as fines on erring companies.”

The ministry has commenced the use of a satellite tracking system to get accurate volume of gas flared by these companies during the time under review. “This effort is to bring in over N360 billion ($2.2 billion) in two years in fines on the air pollution,” our source said.

The fines are to be slammed on the international oil companies (IOCs) and their local counterparts who flare gas illegally through operations within the period under review. “A new satellite gas tracker, which was procured from the Unites States (US), has been deployed and the ministry has given assurance that this online gadget will ensure accurate measurement of volume of gas flared by these companies,” the source said.

The new gas flare tracker is an online map showing data from a US National Oceanographic and Atmospheric Administration satellite that will observe natural gas fires when orbiting over Nigeria. The measurements it records will feed into estimates of how much gas is burned, its carbon dioxide content and its potential value.

“It has the ability to calculate the amount of unpaid fines owed by facility owners, estimated at $1.1 billion per year,” a document of the ministry of health quoted the former Minister of Environment, Laurentia Laraba Mallam, to have said at an event unveiling the system in Abuja.

While it was outlawed in 1984, the burning of gas that occurs in oil deposits “is still a major cause of human and environmental issues across the country,” the former minister had said. If harnessed, the minister said, gas could meet 40 per cent of energy needs in Nigeria.

Africa’s biggest oil producer struggles to generate enough electricity to keep the lights on for over two or three hours a day in some parts of the country. The tracking system will paint a “stark picture of the extent of gas flaring in this country,” Andrew Pocock, Britain’s High Commissioner to Nigeria, had said.

The UK’s Department for International Development provided funding for the project. Nigeria is producing 1.8 million barrels a day of crude oil, 2.2 million barrels when condensate is included data from the Nigerian National Petroleum Corporation (NNPC) showed.

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