Reps investigate oil companies over $14 billion gas flaring penalties

House of Reps
House of Representatives

The House of Representatives on Thursday resolved to set up an Ad-hoc Committee to investigate the non-payment of penalties on gas flaring by Oil Companies to the tune of $14 billion.

 
The committee when set up is expected to report back to the House within 8 weeks for further legislative action. 
 
The House further urged the relevant Government Agencies to undertake a damage and post impact assessment of the gas flared environment and direct the payment of compensation by the Oil Companies to the affected communities.
The House resolution followed a motion sponsored by Honourable Johnson Agbonayinma ans six others entitled, “need to investigate the loss of over $14 Billion as a result of non-payment of gas flared penalties by International Oil Companies (IOCs) From April 2008 -2016.”
Honourable Agbonayinma in his motion said that, “Multi-National Oil Companies which adhere strictly to internationally acceptable environmental best practices in their countries and other parts of the globe have refused to pay the agreed penalties on gas flared in Nigeria.
According to him, “Gas flaring is harmful to the economy and the environment as the gas flared contains toxic substances which cause respiratory diseases and air pollution leading to depletion of the Ozone layer, and ultimately, having adverse effects on the weather and climate.
“Statistics show that the quantity of gas flared in Nigeria exceeds over 40% of gas flared across Africa, which amounts to trillions of Naira that have been wasted over the years”, he said.
The consequences of gas flaring, he said, “include the destruction of farmlands, damaging of crops, contamination of the air and acid rains which, apart from corroding corrugated aluminium roofs, acidify the soil in the areas where gas flaring takes place.”
Speaking further he noted that the Federal Government, in a bid to discourage gas flaring and encourage the redirection of gas flared from waste to wealth, and also to save the environment and the lives of the people living in the gas flared environment, imposed a penalty of $3.5 per 1000 SCF of gas flared by Oil Companies.
To buttress his motion, he added that “the Deputy Director and Head, Upstream of the Department of Petroleum Resources (DPR), while speaking at a Conference in Houston, Texas, USA recently, said that the country has lost $14,298 billion between April 2008 and October 2016 in form of penalties for gas flaring which the International Oil Companies (IOCs) failed to pay, and in a similar vein, the Nigeria Extractive Industries Transparency Initiative (NEITI), in its latest Oil and Gas Audit Report, noted that Firms operating in the country have failed to abide by the regulating penalty of $3.5 for every 1000 SCF of gas flared by oil companies”.
In another development, the House has expressed its readiness to investigate the ₦701 Billion Payment Assurance Facility plus ₦194 Billion Interest Payment approved by the Federal Executive Council for Emergency and Long Term Power Sector Recovery Plan.
To this end, the House has mandated the Committee on Power to investigate the approval with a view to ensuring that the entire process was geared towards the significant improvement of power supply in Nigeria and report back within 4 weeks for further legislative action.
The House resolution followed a motion sponsored by Hon. Chris Azubogu who said that FEC approval of ₦701 Billion for Nigeria Bulk Electricity Trading was an intervention in the Power Sector as well as other payments to Distribution Companies (DISCOS).
According to him, “the Federal Government of Nigeria and the World Bank Group are planning a US$2.519 Billion as financial support for Nigeria Bulk Electricity Trading (NBET) as payment guaranty for the Power Generating and Gas Supplier Companies to ensure stable power supply that will drive the economy.
“The National Council on Privatisation (NCP) and the Bureau of Public Enterprises (BPE) are statutorily empowered to manage the Privatisation and Commercialization Programme by ensuring that the Power Sector Reform progresses successfully.
“The NCP has been properly constituted with the Vice President of Nigeria as the Chairman and the Minister of Finance as the Vice Chairman with representatives of the Ministries of Finance, Trade and Industry, National Planning, Justice and the Central Bank of Nigeria (CBN)”, he stated.
He, however, observed that although the Ministers of Power and Petroleum Resources are not members of the NCP, they ought to be invited to meetings that will involve Energy Steering Committee established by the NCP while the Chief of Staff (COS) to the President should be invited to meetings as the representative of the Office of the President.


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