We’ll recover $9bn gas flaring fines from erring companies – Reps

THE House of Representatives has resolved to recover the over $9 billion gas flaring fines that the Federal government had imposed on erring local and foreign companies operating in the Nigerian oil and gas industry.

The House, through its ad-hoc committee investigating gas flaring in the country, also resolved to investigate the $277,258,304.72 disparity in the gas flare penalties recorded by the National Oil Spill Detection and Response Agency (NOSDRA) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

The committee’s chairman, Ahmed Munir, expressed the Representatives’ resolve while briefing journalists after its inaugural meeting/investigative hearing at the National Assembly Complex, Abuja, on Monday, July 24, 2023.

Munir declared that the 10th Assembly would do everything within its power to ensure the recovery of all unpaid levies, and ensure compliance with extant laws and regulations in that regard.

He said that the committee was not unaware of penalties, amounting to $9 billion, that had not been paid, stressing the determination of the House to recover the fund.

“Second, 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 put in place? Third, the big difference between then and now is, we now have the Petroleum Industry Act in place, so how do you implement it?

“Where we have loopholes is 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 an 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,” he said.

The committee summoned all the chief executive officers of 19 oil and gas companies, including Total/Mobil JV, Total/Oando JV, Total Energies, Azman Oil & Gas Limited, and A. M Shafa Ltd. to appear before the committee on Tuesday.

Infographics on gas flaring in Nigeria from 2012 - 2019.
Infographics on gas flaring in Nigeria from 2012 – 2019.

In his presentation, the chairman, Gas Monitoring Committee of the Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC), Patrick Mgbebu, said the gas flaring penalty payment from 2013-2018 (June) was $0.30 and $2.00 from July 2018 to 2023.

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

He said, “The Commission compared the data from NOSDRA with the data from NUPRC, and 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.

“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.”

In his submission, the NOSDRA director-general, Idris Musa, who noted that the extant penalties on gas flaring were meant to serve as deterrent, suggested that the penalties on gas flaring should be increased.

Musa disclosed that a total of 3.8 billion mscf was flared from 2013 to date, while a total sum of $7.6 billion penalties was payable.

The director at the Federal Ministry of Environment, Olubunmi Olusanya, emphasised the need to give legislative backing to the use of oil tracker as part of measures to end gas flaring in the country.






     

     

    While declaring the sitting open, the Speaker of the House of Representatives, Tajudeen Abbas, noted that gas flaring had been a significant environmental, economic, health and social concern in Nigeria for many years.

    Represented by the chief whip, Usman Kumo, Abbas lamented that official records indicated that Nigeria had been losing about $2.5 billion annually to gas flaring.

    “Gas flaring represents a tremendous waste of valuable resources. Natural gas is a precious energy source that could be utilised for various purposes.
    However, the consequences of gas flaring extend beyond economic considerations. It also poses serious health hazards to nearby communities.

    “It is in the light of the foregoing that this Committee is entrusted with the responsibility of thoroughly examining this issue, understanding its causes and impacts, and proposing effective solutions to mitigate its adverse effects on our environment, economy, and citizens,” he said.

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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