The Federal Government of Nigeria has increased the gas flare penalty from ₦10 per thousand standard cubic feet of gas to $2 or ₦612.8 (at the official exchange rate of N306.4 to one dollar) per thousand standard cubic feet of gas.
The government said the increase is in the case of any firm that produces 10,000 barrels of oil or more while for anyone producing less than 10,000 barrels of oil per day, the penalty has been increased to $0.5 or ₦153.2 per thousand standard cubic square feet of gas.
It disclosed these in the gazetted Flare Gas (Prevention of Waste and Pollution) Regulations, 2018, the Programme Manager, Nigerian Gas Flare Commercialization Programme, Office of the Minister of State for Petroleum Resources, Mr. Justice Derefaka said a fine of ₦50,000 or six months jail term, or both, would be handed down for anyone who provided inaccurate flare data
“The current meagre flare payment of ₦10 per thousand standard cubic feet is increased, in the case of any one producing 10,000 barrels of oil or more, to $2 per thousand standard cubic feet of gas and in the case of anyone producing less than 10,000 barrels of oil per day, to $0.5 per thousand standard cubic square feet of gas.
“There are mandatory additional payments by the producer of $2.50 for failure to produce accurate flare data; failure to provide access to flares or flare sites; failure to sign a connection agreement; in the event of continuous or egregious breaches, there is a possibility of suspension of operations, or a termination of the producer’s licence,” Derefaka said.
The regulation said that the producer would not be liable in a situation where the flaring was caused by an act of war, community disturbance, insurrection, storm, flood, earthquake or other natural phenomenon, which is beyond his/her reasonable control.
The new regulation added that in a situation where a producer failed to provide flare gas data to a request made under regulation four of the stipulated regulations, or fail to supply accurate or complete flare gas data, such producer would be forced to pay a fine of $2.50 per day for every 1,000 SCF of gas flared or vented within the oil or marginal field.
“In the event of the continued failure of the producer to comply with any of the requirements of this regulation, the minister may direct the producer to suspend the operations or revoke any Oil Mining Lease or marginal field awarded to the producer,” it added.
The regulations also requireM gas producers to maintain a daily record of flaring and venting of natural gas produced in association with crude oil and submit same to the DPR within 21 days of each month.