By Ekemini SIMON

THIS is the second of a two-part report that looks at the suffering arising from gas flaring and climate change issues in some Niger Delta communities, while oil companies fail to pay penalties that would have rehabilitated some of the impacted areas.

Read the first part HERE

Remediation funds fail to arrive Delta despite N235.84bn flare penalties 

Isuo Dennis, a resident of Uzere community in Isoko South LGA of Delta State, woke up around 2.00 am, on a rainy night of September 2022 to urinate. However, he was greeted by sounds of panic from his neighbour’s room. As he stepped down from the bed, his legs were submerged in a pool of water. While rushing out of his room, Dennis saw his neighbours battling with the flood water in their rooms and it dawned on him that the community had been flooded.

Dennis told TheMail Newspaper that he lost property worth millions of naira and was displaced for over a month. His experience reflects the tragedy of flood victims from the oil producing communities of Uzere, Araya, Aviara, some parts of Igbide and other communities in Isoko South LGA of Delta State.

Utagba Ogbe in Ndokwa West LGA, was not spared by the flood. Linda Iyoriobhe, a female youth leader in the community said many properties worth millions were destroyed during the 2022 flooding. She said beyond the flood, the heat from gas flaring by companies operating in the area has become a major nuisance to the community.

“To sleep at night is difficult because of the heat from the gas flare. Even the rainy season does not abate the heat,” she said.

Yet, Isoko South, blessed with two oil assets OML 30 and 28 operated respectively by Heritage Energy and NEPL had N13.16bn gas flare penalties payable to it by the oil firms, according to the gas flare tracker which should have been used for environmental remediation and relief.

Ndokwa West hosts several oil companies -Midwestern Oil and Gas, Energia Oil and Gas, Chorus Energy, Pillar Oil on OML 56 asset and Nigerian Agip on OML 61. According to the gas flare tracker, these two assets, should have paid penalties of N70.62bn between 2021 and 2023,

For the 15 oil and gas assets captured by gas flare tracker within Delta State, between 2021 and 2023, a total of N235.84bn in flare penalties should have been utilised for environmental remediation and relief projects.

N76.98bn penalties payable for Other Niger Delta Host Communities 

There are several oil and gas communities across other states of the Niger Delta which have not been spared the brunt of gas flaring. For instance, analysis of data from the gas flare tracker shows that in the last three years, OML 16,15, 124 and in 2023 OML 53, operating in Imo State incurred penalties of N3.83bn

The companies include Heritage Energy, Energia Limited and Midwestern Oil, Agip, Neconde Energy, Seplat Energy and Shell. Others are Chevron, Elcrest E and P Nig, Sogenal, NNPC E and P Ltd and ND Western Ltd.

For OML 4, 5, 111, 98, 96 and OPL 205, operating in Edo State, the gas flare tracker shows penalties of N37.75bn payable by Seplat, Shell, NEPL, Panocean Oil, Dubri and Summit Oil.

OML 108 and 95 assets operated by Express Petroleum and Chevron, in Ondo State and Omadino community in Delta, has a penalty of N10.05bn payable for the same period.

In Ogun State, Alfred James Petroleum and Crownwel have gas penalties of N2.14bn on OPL 306 and 302.

However, there are assets captured by the gas flare tracker without specified host communities and which the TheMail Newspaper could not independently obtain. They include OML 79 and OML39 operated by Shell and OML126 operated by Addax. The three years analysis of data by gas flare tracker shows that the penalties payable is put at N23.21bn.

N149.13bn penalties payable from deep water assets 

Analysis of the data from the gas flare tracker shows that N149.13bn in penalties is payable for gas flared within the deep-water assets between 2021 and 2023. The assets captured by the tracker are seven operated by South Atlantic Petroleum Limited, Famfa Oil Limited, Shell, Agip, Allied Energy, Esso E&P.

Who then are the host communities that should benefit from the multibillion penalties for environmental remediation and relief?

In defining host communities for deep water assets, Section 6 (2a) of the Nigeria Upstream Petroleum Host Communities Development Regulation (2022) provides that a “host community shall be a littoral community to a deep-water area of operation located along the Gulf of Guinea of the Nigerian shoreline up to about 500 metres inland, provided that such a community is gazetted by the National Boundary Commission.”

After the gazette by the National Boundary Commission, the law empowers NUPRC to assign such communities to an asset. Section 6 (2d) of the Regulation provides: “Littoral communities to deep-water area of operations shall be categorised by their respective state coastlines and shall be assigned to a settlor by the Commission.”

However, a Freedom of Information Act (FOIA) request to NUPRC in October asking to know these communities assigned to deep water assets did not elicit any response.

N454.55bn billion gas flare penalties unaccounted for

Analysis of data from the National Oil Spill Detection and Response Agency (NOSDRA) gas flare tracker shows that penalties payable for gas flared across all the onshore, shallow water and deep-water assets captured by the tracker amounted to N764.05bn. The breakdown shows that N203.21bn was payable for 2021, the sum of N188.05bn for 2022 and N372.79bn for 2023.

However, according to the 2023 Annual Report of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the total gas flare penalties it received from oil and gas companies in the three years under review was N309,513,735,748, not N764.05bn as stated by the tracker.  It revealed that it received N98.548bn in 2021; N70.422bn in 2022 and N140.542bn in 2023. This is only 40.5 percent of what the commission should have received, according to data by gas flare tracker.

The shortfall, based on analysis of government documents is linked to failure of oil and gas companies to pay the actual amount on penalties, as well as failure of NUPRC to enforce the actual payment of penalties of gas flared.

Comparison of the amount from NOSDRA’s gas flare tracker on what oil and gas companies are expected to pay, with data published by the 2021 NEITI Oil and Gas Report on what was actually received is revealing.

The data shows widespread discrepancies. For instance, in 2021, the gas flare tracker shows that penalties accrued to Mobil Producing for its four oil and gas shallow water assets, OML 67,68, 70 and 104 is summed at $99.3m (N39.69bn by 399.68 exchange rate). Was exchange rate 399.68 in 2021 (This is the average CBN Exchange rate that NEITI report 2021 and 2022- 2023 published was used in NNPC related transaction and other designated cases. Kindly check page 7 of the 2021 report and page 16 of the 2022 report)

Yet, the 2021 NEITI Oil and Gas report states clearly that the company paid $21,180,000 (N8.46bn by 399.68 exchange rate). This leaves an unremitted amount of N31.23bn.

In April 2024, TheMail newspaper wrote a FOIA request to select oil and gas companies, including Mobil Producing, Frontier oil limited, Universal Energy, Moni Pulo, Addax Petroleum, Amni International, Total Energies, Oriental Energy as well as Network Exploration. The FOIA letters requested details of the volume of gas flared by each of the companies between 2021 and 2023, the penalties payable and the actual amounts paid. None of the companies responded as at early December.

NUPRC fails to use N309.5bn remediation, relief funds for intended purpose

Despite the sum of N309.5 billion NUPRC reportedly received in the last three years as gas flare penalties, findings show that the commission had failed, in line with Section 103(3) of the PIA, to issue a guideline on the execution of environmental remediation projects, three years after the Act came into force.

TheMail, in its findings could not identify a single environmental remediation/relief project in the oil and gas host communities it visited in Akwa Ibom, Rivers, Delta and Bayelsa states, attributed to the utilisation of the gas flare penalties. Stakeholders across the host communities cited in this report were asked if NUPRC had carried out any environmental remediation project or provided relief. None responded in the affirmative.

NUPRC, National Assembly in spiral of silence over findings

The NUPRC has failed to respond to the findings of this investigation. In March 2024 and early October 2024, this newspaper had through FOIA requests to the chief executive of the Commission, Gbenga Komolafe, asked for details of gas flaring penalties received by the Commission in the last three years.

The request had specifically asked for the identity of each asset flaring gas, the operator(s) of the asset, the volume flared each year, penalties payable, actual penalty received and the host communities of the assets which gas is being flared.

The FOIA letter also requested to know the environmental remediation and relief projects embarked upon by the commission from the gas flare penalties in each of the host communities. The request further asked to know the title of the environmental remediation projects, the location, cost of project, duration of the project, and contractor for each project. Although both requests were acknowledged, the commission failed to respond.

Again, TheMail Newspaper visited the Abuja Office of NUPRC on October 23, 2024, to seek further clarifications on the findings. The newspaper was, however, not allowed entrance to the office over claims that there was no prior appointment.

On November 18, this newspaper made a phone call to the Head, Public Affairs and Communication of NUPRC, Olaide Shonola, shared the findings with the commission and sought clarification. Shonola requested the questions be communicated through Whatsapp, which the newspaper obliged.  No response came.

When she was again reached on November 20 for an update, Shonola said the NUPRC was working on giving the newspaper a response. Yet, the clarification was not given at the time of filing this report.

Also, when contacted on November 18 for clarifications on the oversight role of the National Assembly over the issues uncovered in this report, the Chairman, House of Representatives Committee on Host Communities, Dumnamene Dekor said his committee was considering the questions and would respond. Yet, this response never came as at the time of filing this report.

This Investigation is supported by the John D. and Catherine T. MacArthur Foundation and the International Centre for Investigative Reporting.