Reps to investigate ‘$680m revenue loss’ to gas flaring

The house of representatives has resolved to investigate the alleged $680 million revenue loss from gas flaring activities in the country. 

The lower legislative chamber passed the resolution following the adoption of a motion sponsored by Abdullahi Halims, lawmaker from Kogi.

While leading the debate during plenary session on Thursday, Halims said gas flaring data reported between 2018 and 2019 was drastically reduced after gas flaring penalty was introduced.

The lawmaker noted that there is a discrepancy between the data from the Gas Flare Tracker via Satellite, used globally and the flared volume reported by the government.

He added the under reported data cost government huge revenue loses with health and environmental implication.

“Concerned that after the penalty regime started, the gas flare volumes reported by Nigeria was drastically reduced for 2018 and 2019 and created a huge discrepancy between the gas flared volumes reported by the National Oil Spill Detection and Response Agency (NOSDRA) Gas Flare Tracker (GFT) which is Satellite-based and the volumes declared by the Federal Government of Nigeria for the period,” he said.

“Further aware that FOSTER (DFID Sponsored -Facility for Oil Sector Transformation) informed the Gas Resources Committee that the discrepancy as currently determined is 190bcf and IS0bcf in 2018 and 2019 respectively which potentially represent an aggregate revenue loss of $680Million in unpaid penalties to the Federal Government of Nigeria in 2018 and 2019.

“Alarmed that the loss to Nigeria may be higher when the penalties accrues from venting are determined and added to the money accruable from flared gas discrepancies and other losses in terms of power generation which is now estimated at 98 GWH for 2018 and 2019 respectively.

“Also concerned that the discrepancy will cost the government huge revenue loss from penalties (estimated at $680Million & 98GWh for 2018 and 2019), and present a planning challenge in terms of inaccuracies in figures that may be presented for gas flare investments and will create difficulties when ascertaining the environmental consequences of gas flaring and attendant adverse health implication on man, animals and flora in the petroleum producing communities.”

The lawmaker further said there are “grounds to suspect under-reporting by the government of Nigeria and the Oil Companies, to evade the gas flare penalty imposed by the Flare Gas Regulations 2018.

“Aware that the report from the Gas Flare Tracker via Satellite is used and accepted by the Petroleum Industry globally, both in developed and developing countries for gas flare volumes records, thus, it is only in Nigeria that discrepancies exist between the flared volume reported by the satellite and the government.

“Further aware that FOSTER (DFID Sponsored -Facility for Oil Sector Transformation) informed the Gas Resources Committee that the discrepancy as currently determined is 190bcf and IS0bcf in 2018 and 2019 respectively which potentially represent an aggregate revenue loss of $680Million in unpaid penalties to the Federal Government of Nigeria in 2018 and 2019.”

The motion was unanimously adopted by the lawmakers after it was put to a voice vote.

The house therefore mandated its committee on gas resources to investigate the gas flare volume reported by the Nigerian Government and the NOSDRA Gas Flare Tracker and ascertain the amount of gas flared and the extent of the discrepancies.