FG targets N103bn from gas flaring penalty
The Federal Government has said gas flare penalty payment by oil and gas companies in the country will increase to N103.51bn this year.
The Director General, Budget Office of the Federation, Ben Akabueze, disclosed this in a presentation where he highlighted the revenue measures taken by the government to manage the resultant budgetary pressure from the coronavirus crisis and the oil price slump.
Akabueze said the government would “tighten implementation of the 2018 revised gas flare penalty payment regime (resulting in upward revision of gas flare penalty for 2020 from N44.7bn to N103.51bn)”.
According to the revised payment regime for gas flaring, oil firms producing 10,000 barrels of oil or more per day will pay $2 per 1,000 standard cubic feet of gas, compared to N10 per 1,000 scf in the past.
Firms producing less than 10,000 barrels of oil per day will pay a gas flare penalty of $0.5 per 1,000 scf.
The PUNCH reported in February that oil and gas firms operating in the country flared a total of 225.81 billion scf of gas from January to November 2019, according to data from the Nigerian National Petroleum Corporation.
The NNPC, in its latest monthly report, said a total of 253.09 billion scf of natural gas was produced in January, while 7.9 per cent or 643.59 million scf per day was flared.
It said a total of 3,128.57 billion scf of gas was produced from January 2019 to January 2020, with an average gas flare rate of 8.46 per cent i.e. 671.40 million scf per day.
According to the report, production from joint ventures, production sharing contracts and the Nigerian Petroleum Development Company (an NNPC subsidiary) contributed about 69.17 per cent, 21.59 per cent and 9.24 per cent respectively to the total national gas production.
The Department of Petroleum Resources said in February that it had shortlisted 200 investors to bid for gas flare sites after the evaluation of statements of qualification submitted by interested companies.
The DPR said 45 gas flare sites would be put up for auction in the first phase of the Nigerian Gas Flare Commercialisation Programme.