February 7, 2018

Oil firms flare N276bn in 11 months

Oil firms flare N276bn in 11 months

*Gas flare

By Micheal Eboh
Nigeria lost $767.13 million, about N276.167 billion to gas flaring in eleven months, between January and November 2017, as oil and gas firms operating in the country flared 255.71 billion standard cubic (SCF) feet of gas.

*Gas flare

According to data obtained from the Nigerian National Petroleum Corporation’s, NNPC, Monthly Financial and Operations Report for November 2017, the volume of gas flared represented 10.01 per cent of the 2.553 trillion SCF of gas produced in the country within the eleven months period.

Using an average gas price of $3 per 1,000 SCF, total gas flare of 255.71 billion translates to $767.13 million, while using an average exchange rate of N360 to a dollar, it translates to N276.167 billion.

Giving a breakdown of the volume of gas flared on a month-on-month basis, the report stated that between January and June 2017, the oil firms flared 24.77 billion SCF, 20.42 billion SCF, 21.47 billion SCF, 20.50 billion SCF, 21.75 billion SCF and 19.90 billion SCF respectively.

On the other hand, 22.38 billion SCF, 28.51 billion SCF, 25.53 billion SCF, 24.24 billion SCF and 26.24 billion SCF were flared in July, August, September, October and November 2017 respectively.

In the addition to the volume of gas flared, 692.6 billion SCF of the commodity was re-injected, while 125.04 billion SCF was utilized as fuel gas; bringing total non-commercialised gas to 1.073 trillion SCF, representing 44.13 per cent. Conversely, 352.42 billion SCF of gas was utilized for domestic consumption, representing 13.8 per cent of the total gas produced in the eleven months period, with 217.63 billion SCF utilized by power companies to generate electricity and 134.81 billion SCF utilized by industries.

Furthermore, 1.127 billion SCF of gas was exported by oil firms, representing 44.13 per cent of total gas produced in the period under review. Specifically, 12.32 billion SCF of gas was exported to the West African Gas Pipeline, WAPG, in the eleven months period; 56.65 billion SCF was exported through the Escravos Gas to Liquid (EGTL) project; 32.25 billion SCF was exported as Natural Gas Liquid/Liquefied Petroleum Gas, NGL/LPG; while 1.027 trillion SCF of gas was exported through the Nigerian Liquefied Natural Gas, NLNG.

However, in its analysis of gas production and utilization in November 2017, the report said, “Out of the 236.80 billion SCF of gas supplied in November 2017, a total of 136.65 billion SCF of gas was commercialized comprising of 35.33 billion SCF and 101.32 billion SCF for the domestic and export market respectively.

“This translates to an average daily supply of 1.177 billion SCF per day of gas to the domestic market and 3.377 1.177 billion SCF per day of gas supplied to the export market.

“This implies that 57.71 per cent of the average daily gas produced was commercialized while the balance of 42.49 per cent was either re-injected, used as upstream fuel gas or flared. Gas flare rate was 11.08 per cent for the month of November 2017, that is, 874.72 1.177 million SCF per day compared with average gas flare rate of 10.90 per cent, that is, 817.92 1.177 million SCF per day for the period November 2016 to November 2017.”