Nigeria takes action to award licenses and commercialize gas flaring

Government Issues Additional Licences To Break The Monopoly On Gas Aggregation

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) Friday moved to grant 48 licenses to investors, around seven years after the Muhammadu Buhari-led administration launched the Nigerian Gas Flare Commercialization Programme (NGFCP).

The development aims to control decades of gas flaring in the oil producing region and enable the federation to generate billions of dollars in investment and signature bonuses. It comes at a time of energy crisis and transition and against the backdrop of the government’s decade of gas policy, according to Gbenga Komolafe, chairman of NUPRC.

He added that the effort stimulates higher capital inflow to the Nigerian oil and gas sector, aims to enhance investment and employment possibilities, and has several benefits that are in line with the country’s sustainable development objectives.

He claims that the project is specifically intended to lessen environmental pollution, strengthen Nigeria’s energy transition plans, and enhance infrastructure and revenue.

“This is a very defining moment in the history of Nigeria’s oil and gas industry and being a part of this journey is by no means a trivial task. This is especially so because the NGFCP checks the box on many fronts.”

“Apart from forestalling the negative impacts of gas flaring on the environment, the programme also ends the wanton wastage of our premium economic resources. In today’s carbon constrained world, where fossil fuel is becoming less and less popular in view of issues of climate change, natural gas has assumed a stature of significant importance as the bridging fuel for many oil and gas producing nations,” Komolafe said.

On the projected revenue, he also added that: “What we can tell you is that we aim to generate billions of dollars from the programme. So that at the end of the exercise, we’ll be able to get a full account of that revenue from the programme to the government.”

Despite having more than 208 trillion standard cubic feet of gas at present, Nigeria has not been able to use its resources for economic growth. While flaring continues, the existing reserve continues to be the result of an accidental discovery.

According to the World Bank, the top seven gas-flaring nations over the past nine years continued to be Russia, Iraq, Iran, the United States, Algeria, Venezuela, and Nigeria.

According to the Bretton Woods institution, the seven nations produced 40% of the world’s oil annually but are responsible for about 2/3, or 65%, of all gas flared worldwide.

The Federal Executive Council (FEC) gave its blessing before the ministry of petroleum resources launched its gas commercialization program on December 13, 2016, but results have been elusive for more than seven years.

According to Dr. Nuhu Habib, Executive Commissioner for Development and Production at the NUPRC, the Commission expects to complete the licensing process in roughly two months.

He revealed that the gas commercialization strategy would remove 10% of the gas that is currently flared in the nation.

According to Habib, the commission has engaged in several conversations with investors from Europe and America, and the process is international in scope.

The commissioners claimed that in ensuring that the infrastructure, financial, and regulatory incentives to advance the project are supplied, the regulator is doing it best.

Habib stated:  “So at least for now, I think we have ticked all the boxes. We will continue to collaborate and continue to engage with stakeholders and communities, whether they are investors, whether they are locals, whether they are technology providers, whether they are financiers or other public agencies.”

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