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DPR to enforce zero flare for future oil projects

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By Nnenna Ezeah

Oil and gas industry regulator, the Department of Petroleum Resources, DPR, said it is possible for the country to hit the 10 per cent gas flaring mark in the nearest future by stopping the issuance of licenses on projects that has capacity to flare gas.

Speaking at a media interactive session recently in Lagos, the Director, DPR, Mr. Osten Olorunsola, said the gas currently flared was from past developments projects that had no gas solutions.

He said that Nigeria was still flaring about 24 per cent of its associated gas, pointing out that no oil producing country can attain zero gas flare.

He also disclosed that Nigeria currently flares about 24 percent of its gas. . An estimated $2.5billion was reportedly lost yearly due to lack of infrastructure to harness the gas.

He, however, reiterated, “We are adequately monitoring the activities of the gas sector; we have progressed on the development of the network code. It is just rules guiding transportation of gas and we have granted several licenses on liquefied petroleum gas, LPG; compressed natural gas, CNG; and auto-gas plants.”

In his update developments in the petroleum sector, Olorunsola said the regulator will pursue gas exploitation aggressively in 2012, to grow reserves.

“The reserves value for oil as at January 1, 2011, was 31.219 billion barrels, condensates 5.314 billion barrels, while a total gas reserve was 182.3trillion cubic feet, tcf. Oil production from January to December is averagely 2.4 million barrels per day”

The DPR boss said the department has continued to effectively administer domestic gas supply obligation, saying, “We have seen that there is quite a lot more sediments even deeper than the one that have been found, so we are encouraging companies to go deeper especially now that we know the value of gas.

“The effective use of associated gas, it is believed, would provide environmental improvements by reducing flaring which contributed to global warming,” he added.

In view of the hazards associated with flaring, the Federal Government, a few years ago, directed the shutting down of oil fields where gas is being flared considerably more than the crude oil produced. The move was said to have led to a drastic reduction in the volume of gas being flared from the 2.5bcf/d to about 1.5bcf/d in 2010.

It would be recalled that the House of Representatives in 2009, adopted a report setting December 31, 2012, as the new deadline for zero flare in the country.

The new deadline followed the adoption of a report of its committees on Gas Resources and Justice, on a Bill for an Act to amend the Associated Gas re-injection Act, No.99 of 1979 Cap.A25 laws of the Federation of Nigeria, 2004.

The lawmakers also resolved that any company that declared an incorrect flared gas volume shall pay a penalty fee of $100,000, in addition to the payment of the difference of such declared volumes at the prevailing international gas market price.

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