Kachikwu: Nigeria Losing $1bn Yearly to False Gas Flare Data


Chineme Okafor in Abuja

Nigeria is losing between $500 million to $1 billion in revenue annually due to false gas flare data reported by operators in her oil and gas fields, the Minister of State for Petroleum Resources, Dr. Ibe Kachikwu has said.

Speaking in Abuja tuesday at the Gas Competence Seminar which had the theme, ‘Towards ending gas flaring and unlocking gas potential in Nigeria,’ Kachikwu said the federal government would set up an independent tracking mechanism to ascertain the actual volume of gas that was flared in the country from 2017.

He also stated that gas is being priced in the United States dollar, and that the country has to find a way to stop the flaring.

“There is an urgency of yesterday to drive the policy that would enable us get out of gas flaring. I hear you talking about 10 per cent non-compliance, meaning that we have achieved a 90 per cent factor. My gut feeling is that these numbers are very mistaken.

“Beginning next year, we will be putting up an independent tracking mechanism, not relying on figures from the IOCs (International Oil Companies) and from DPR (Department of Petroleum Resources), to find out really what is the flare volume. My feeling is that there are a lot of management of those figures to suit the cap of the penalties that are being charged,” he said.

According to him: “My take is that we lose over half a billion to a billion of government revenue looking at the basis of the present penalties position. Nobody is effectively monitoring the volume, so when you actually go for the real effect of what is flared, in terms of statistics, it is much higher than that figure. However, we must appreciate the efforts that have been made in the past, efforts to increase penalties among others.”

The minister also talked about current price movements in the global crude oil market, saying that the marginal rise in the price of crude oil in the past few days was not an indication of an imminent boom in the cost of the commodity in the nearest future.

He explained that the decisions by members of the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC members to cut down production may have warranted the marginal rise in crude prices, but stressed that further increase in prices could not be guaranteed as this may not last.

“Now, as good as all these may be, the reality is that in the world, the era of high-priced oil is gone. In fact, it is going to take a lot of work to sustain the $60 per barrel price and it is going to take a lot of discipline and concerted effort as well,” he said.

Kachikwu stressed the need for Nigeria to commercialise its gas resources on the basis that revenue from crude oil alone cannot sustain her economy.
He stated that ensuring gas commercialisation, utilisation and transportation would go a long way in buoying Nigeria’s economy.

He also wondered why Nigeria was still facing electricity problems despite producing a lot of gas.
Similarly, the Minister of Power, Works and Housing, Babatunde Fashola, said earlier in his remarks that Nigeria’s perennial power problems were man-made and not as a result of technical challenges.

Fashola further stated that in the last couple of days, gas flaring and most especially, sabotage had deprived most of the country’s key gas power plants of gas, thereby, leading to a significant decline in power supply across the country.