The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has disclosed that it collected a total of USD85.1 million (N44 billion) from Oil Companies as gas flare penalty.
NUPRC disclosed this in a document made available to journalists in Abuja on Friday.
The Commission noted that while efforts were towards gas flare elimination and not penalty, it has “collected a total of USD85.1 million from January 2023 to date from gas flare penalty”.
It noted that the flare gas administration should not be viewed as a sustainable revenue stream, adding that the flare fees are to serve as a deterrent to drive the industry to greater compliance towards eliminating gas flaring and generation of revenue from gas monetization rather than flare payment.
The Commission said, it has led the effort in ensuring that the Federal Government’s drive to eliminate gas flaring in the country was achieved in a timely manner.
The NUPRC added that “all companies currently flaring gas are charged gas flare fees in line with the relevant provisions of the law, thus driving down the appetite of oil and gas companies to continue gas flaring, while increasing Government take from the sector.
“For the avoidance of doubt, the Commission, being the sole regulatory body in Nigeria’s upstream oil and gas industry keeps record of daily, weekly, and monthly gas volumes from all oil and gas fields of operation”, it said.
The regulator clarified that “the disparity often noticed in the figures given by some industry participants is because theirs are from satellite estimates whereas the ones from the Commission are from fiscal grade metering systems and in a few cases material balance, with due consideration for gas oil ratios of the produced and associated gas”.
The Commission said, “in accordance with the provisions of the Gas (Prevention of Waste and Pollution) Regulations 2018, the flare penalty is not a flat rate of USD2 per thousand Standard cubic foot (Scf) but a two-tier regime of USD2 and USD.5 per thousand Scf, depending on the average daily crude oil production”.
NUPRC said, it is the custodian of authentic data, therefore, putting out
erroneous data from sources that might be construed to have genuine data or from erroneous data sources could mislead stakeholders and undermine the mandate of the Commission in the dispensation of its functions.
It said, “as the sole regulatory body in the upstream oil and gas industry, the Commission is readily available to provide accurate and bankable data required for any publication and economic analysis”.
