Nigeria Approves Stiffer Gas Flare Regulation, Raise Penalty To $2/1000scf

Gas flaring

Nigeria has announced stiffer regulations aimed at tackling gas flare menace and raised the penalty for gas flaring from N10 to $2 per 1,000 standard cubic feet of gas (SCF).

The new regulation is contained in the gazetted ‘Flare Gas (Prevention of Waste and Pollution) Regulations 2018,’ released Tuesday by the Federal Ministry of Petroleum Resources,

At the current exchange rate of N306.35 to a dollar, the $2 penalty translates to N612.7 per 1,000 SCF.

The government also stipulated a fine of N50,000 or a six months prison term or both, for anyone who provides inaccurate flare data.

Furthermore, the new regulation captures as offences situations where a producer fails to provide a qualified applicant with access to any flare site, or provide a permit holder with access to any flare site, or fail to prepare, maintain or submit the logs or records or reports required by the regulation within the time required by the Department of Petroleum Resources (DPR).

Mr. Justice Derefaka, Program Manager, Nigeria Gas Flare Commercialization Programme, who presented the document, explained however, that the $2 penalty will be applicable only to organisations producing 10,000 barrels of oil or more daily, while organisations producing less than 10,000 barrels of oil per day will pay a penalty of $0.50 per 1,000scf irrespective of whether it is routine or non-routine flaring.

According to the new regulation, where the flaring was caused by an act of war, community disturbance, storm, flood, earthquake or other natural phenomenon which is beyond the reasonable control of the producer, the producer would not be held liable.

Also the $2.50 per day penalty will be applied in situation where a producer fail to install metering equipment within the time required to do so by the DPR; or fail to agree to enter into a concession agreement with a permit holder.

It added “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.”

Under the new regulation, gas producers are now required to maintain daily log of flaring and venting of natural gas produced in association with crude oil and submit same to the DPR within 21 days following the end of each month. It added that all such logs must be based on data retrieved from metering equipment installed at the various facilities.

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