Oil firms to stop gas flaring in five years

Some International Oil Companies in Nigeria are currently working on a five-year programme to stop or reduce to the barest minimum cases of gas flaring in their production fields. This, it was learnt on Friday followed the increased threat by the Federal Government to impose heavy penalty fees on defaulters or shut their fields.
Our correspondent gathered that some of the IOCs had developed programmes to address the menace of gas flaring to a global acceptable standard in less than five years from now.
Nigeria is the holder of the world’s seventh largest natural gas reserves. However, the country is considered to be one of the top two gas flaring nations in the world, after Russia.
The nation routinely flares between 1.3 and 1.4 billion cubic feet of gas a day, down from about 2.5 bcf one and a half years ago.
Russia flares around 20 billion cubic metres of associated gas each year, or approximately one-third of the total amount extracted at the country’s oil fields.
Last year, the Federal Government had said it might shut down some oil fields as it tried to clamp down on gas flaring defaulters, even if it would lead to loss of revenue.
There is also the fear that government might make public names of defaulters if IOCs failed to adhere to directives of the Department of Petroleum Resources as regards flaring.
Last year, a revelation by the Petroleum Revenue Special Task Force, headed by Nuhu Ribadu, showed that none of the oil companies operating in Nigeria had paid any penalty to the coffers of the government for gas flaring since the beginning of this year.
As a result of the evasion by the oil firms, Nigeria reportedly lost a whopping sum in 2012 alone.
Our correspondent learnt that the biggest oil producer in the country, Shell Petroleum Development Company of Nigeria, is currently working on a programme to achieve the feat in less than five years.
The company, it was gathered, is currently working on two major projects.
The firm, it was also learnt, had stopped flaring gas from its new projects.
The Director, Department of Petroleum Resources, Mr. Osten Olorunsola, said, “One of the things we are doing is to do some analysis for government, to such an extent that it will even mean a proposal to shut down fields to avert huge gas flaring.
“We will probably make that position known to government very soon.”
Despite a noticeable dip in flaring of associated petroleum gas, produced as a by-product of crude extraction, Olorunsola said government was unhappy with the pace of decline.
“Over the last few years, we have seen some bit of reduction, but the quantum is not as expected. We want a lot more to come down as low as possible,” he said.
A long-delayed Petroleum Industry Bill, currently in the National assembly, proposes that gas flaring be banned at a date to be decided by the minister of petroleum resources.
Oil majors such as Shell and Total are among the top global operators that dominate the Nigerian oil sector, although smaller companies, including Afren and Oando, are expanding their presence in the West African state.
While the issue of flaring was an industry-wide phenomenon, Olorunsola said the worst culprits were older fields found onshore, which were not fitted with “gas solutions” when built decades ago.
“So, operationally, it is difficult to retrofit solutions after, but if you consider recent developments, they all had gas solution as part of their development concepts,” he said.
Adding to the desire to capture this wasted gas was the ongoing development of a viable local gas market for Africa’s most populous nation, something which was not there previously.
“Today, gas is of value; so, there is a lot of appetite and hunger to actually mop it up,” he said.