The House of Representatives unveiled plans on Thursday to recover the multi-million dollar penalty imposed on both local and foreign oil companies involved in gas flaring in Nigeria.
The resolution was passed following the adoption of a motion on the “Need to address the lingering issue of gas flaring by Oil and Gas Companies,” sponsored by Hon. Ahmed Munir.
In his lead debate, Hon. Munir acknowledged that Nigeria is blessed with vast oil and natural gas resources but observed that due to inadequate resource management, a significant amount of natural gas is flared.
“The House is aware of a Report on National Oil Spill Detection and Response Agency, NOSDRA, which states that in 2022, Nigeria flared 216.5 billion standard cubic feet of gas in about eleven months despite its commitment in November 2021 to reach net zero by 2060.
“The House is also aware that the report states that 12 million tonnes of CO2 were emitted into the atmosphere, thus contributing to global warming, while useful natural gas valued at $0.79 billion was burned by the Nigerian oil and gas industry, equivalent to the value of $450 million, many of which were said not to be collected.
“The House is concerned that in 2022, 22,500 Gigawatt-hours of potential power generation went to waste, equivalent to the annual electricity use of 511 million Nigerian citizens.
“The House is also concerned that in 2021, an estimated $761.19 million was lost to gas flaring, and a total of N316.5 billion monetary value would have accrued to the government if it had captured this volume and repurposed it.
“This sum would have helped the country provide basic amenities, as stated in the 2022 fiscal budget. The amount would have financed the total expenditure for Primary Health Centres (PHCs), rural electrification projects, and the maintenance of all road and bridge projects by the Federal Roads Maintenance Agency (FERMA).
“These have a collective figure of N227.13 billion. A breakdown shows that N24.4 billion was budgeted for PHCs, N113.96 billion for rural electrification, and N88.76 billion for FERMA.
“The House is worried that in 2023 the trend continues as N150 billion value of gas was flared within the month of January to April 2023.
“In the last decade, approximately $9.05 billion has been lost to gas flaring.
“This money would have offset 23.62% of the country’s total foreign debt of $38.32 billion.
“The House is also worried that in addition to wasting a valuable source of energy, flaring has a negative impact on human health, climate, and the environment.”
After the debate, the Speaker urged NOSDRA to provide the House with specified information on companies involved in flaring within two weeks, including the amount flared and penalty costs in the last decade for both local and international oil companies (IOCs), so that outstanding debts can be fully recovered.
The lawmakers also urged key and relevant government agencies in the petroleum sector, including NNPCL, NOSDRA under the Ministry of Environment, and NERC under the Ministry of Power, to avoid working in silos and strengthen synergy to produce a practical and unified multi-level governance and policy coherence analysis that will address gas flaring, protect the environment, and boost energy supply.
To this end, the House mandated the joint Committees on Petroleum Upstream, Gas, Power, Environment, and Legislative Compliance (when constituted) to ensure compliance.
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