Nigerian government gas flaring bill close to finalisation

Nigeria’s Petroleum Industry Bill (PIB), which will come into force at the end of this year, is being passed through the Nigerian government and is close to finalisation.

According to the bill, “Natural gas shall not be flared or vented after 31^st December, 2012, in any oil and gas production operation, block or field, onshore or offshore or gas facility … Any licensee who flares or vents gas without the permission of the Minister in (special) circumstances … shall be liable to pay a fine which shall not be less than the value of the gas.”

According to figures from the state oil firm, Nigeria flared off 30 billion ft³ of gas in January 2012, a figure equivalent to roughly a third of UK’s annual consumption.

The three main companies operating in Nigeria: Shell, Chevron and ExxonMobil are all responsible for the flaring of billions of cubic feet of associated gas. ExxonMobil flared 9.85 billion ft³, Chevron flared 8.25 billion ft³ and Shell flared 5.44 billion ft³. Oil majors claim that they would be happy to trap the associated gas, but no market for it has been supplied.

The long delays that have hampered the development of the PIB have raised concerns amongst oil and gas industry leaders in the region. SPDC’s managing director, Mutiu Sunmonu, said “The debate on PIB has been going on for a bit too long … The consequences of fiscal uncertainty can be seen here.

“Nigerian oil production will begin to decline unless government tackles the uncertainty created by the non-passage of the bill.

“We hope that the PIB will set out the terms for long-term investment and pave the way for a fresh offshore licensing round which could uncover billions of barrels of oil. It is, therefore, essential that we get the PIB right.”

Edited from various sources by David Bizley

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/29052012/nigerian_government_gas_flaring_bill_close_to_finalisation/