Gas Flaring: Tackling Data Manipulation In Nigeria

Gas flare site

Indications have emerged that oil companies operating in Nigeria may have been manipulating gas flare data since 2018 when a new gas flare regulation was introduced by the Nigerian government, writes e360


Prior to 2018, operators pay a penalty of 50cent per million standard cubic feet of gas (MMSCF) flared, but with the increase in the penalty to $3.50 for companies producing more than 10,000 barrel of oil per day (bpd), wide discrepancies have been observed in data reported by companies, findings have shown.

A comparison of data obtained by the Gas Flare Tracker (GFT), a satellite based environmental monitoring tool, and data from the Nigerian National Petroleum Corporation (NNPC) as submitted by oil companies, showed a sharp difference beginning from 2018 when the new flare penalty came into implementation.

E360 gathered that the disparities, coupled with the government’s inability to independently determine what it is owed through lack of standard metering systems in oil and gas operations, was estimated to be costing the government about $400million annually from gas flare penalty underpayment alone, which led to the creation of the GFT.

Giving details of this development during an online training for CSOs and media, organised by African Initiative for Transparency, Accountability and Responsible Leadership, with Support from Facility for Oil Sector Transformation II (FOSTER), Mr. Jesse Martins Manufor, explained that since 2013 when the GFT was launched, data from the tracker significantly matched that of the volumes declared by the oil and gas companies in the records of NNPC up until 2017.

“However, there has been a significant variation in volumes in the NNPC 2018 and 2019 data as compared to the GTF. These variations appear to be significantly high,” Manufor said.

According to the NNPC’s data, in 2018 Nigeria flared 282bcf of gas which makes about 10percent of the total gas produced. On the other hand, GFT reported 472.4bcf of gas for the same year. Also, according to NGFCP, Nigeria flared 325bscf of associated gas in 2019, representing 11percent of gas produced in the country, while GFT recorded 475bscf as gas flared for the same year.

Global warming

E360 learnt that the GFT, developed in 2014 and upgraded in 2019, uses remote sensing to determine the amount of flare. It moves across the Niger Delta every 24 hours, records and calculate the value of gas flared, emissions, fines and the energy that can be generated from the flares. The data, domiciled at NOSDRA, are satellite generated, and cannot be manipulated.

“Prior 2018, it made more sense to flare and pay a penalty of 50cent because there was no stringent enforcement. However, with the increase in penalty to $3.50 for companies producing more than 10,000 bpd, the new regulation might be responsible for the discrepancies,” Manufor stated.

The Energy expert further disclosed that Nigeria was only able to auction 48 flare site out of the over 180 flare sites from its just concluded bidding round as a result of poor data.

“Companies that wanted to bid for these sites did not know how much gas they will get, an information relevant in determining how much to invest or the possible profit from their investment. The disparities also show that Nigeria is far away from meeting its commitment towards flare out by 2020,” Manufor added.

Also in his presentation on gas flare commercialization strategy, Dr Adeleye Solomon, noted that a major concern is the population growth rate, which according to the National Bureau of Statistics, is about 3percent while unemployment is about 12percent per year, an indication that there is need to create jobs for 122 million people in the next 10 years.

“If Nigeria utilises its gas effectively, it has a potential of creating about 6 million jobs every year through the GBIs and other companies that will spring from these industries,” he said, adding that several intervention studies have been concluded and proven in this regard.

LNG tanker

Findings, he said, showed that NLNG Train 7 will utilise 1.27bcf/d with an investment of $3.6 billion. The economic benefit that will be derived is about 15percent and a total of 4,211 jobs will be created.

On the other hand, if 0.5bcf/d of gas is used in the domestic GBIs, with an investment of $9.5 billion, the economic benefit that will be derived is about 120percent and total jobs that will be created is over 1 million, the expert said.

In order to ensure proper harnessing of Nigeria’s abundant gas resources in a manner that works for government and citizens, the forum urged the Department of Petroleum Resources (DPR) to ensure it uses GFT data to checkmate and monitor data reported by operating companies and on an annual basis. This is to help determine how much gas is flared, check revenue loss and how much flare gas can be harnessed and used for various purposes.

The meeting also concluded that it is necessary for the government to introduce metering which will enable it monitor all gas flare sites and ensure accurate reporting through its agencies. This, the group agreed will provide companies with accurate data that can be used for investment purposes.

It will also help in curtailing Nigeria’s contributions to climate change and give better direction on the country’s 2020 flare out target.

The group also called for proper investigation into the data discrepancies, and sanctions for companies possibly involved in the possible data manipulation where proven to serve as deterrent.

The federal government had in April last year, said it would no longer issue approvals to new gas projects which do not have adequate zero flare modalities, as part of efforts to end gas flaring in the country.

This experts believe if effectively implemented, will go a long way in helping Nigeria fulfil it’s commitments to the Oneplanet initiative, while also ensuring an end to the devastating effects of gas flaring faced by oil host communities.


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