The Federal Government may jack up the penalty charged for every 100 standard cubic feet of gas flared to N13,000 ($100) from the current N10, if it adopts the recommendations of the Department of Petroleum Resources.
This is one of the measures put forward by the Gas Department of the DPR to enforce compliance of the gas flaring policy of the government.
The government had set a deadline of January 1, 2008 for complete flare-out, but just a few months to the set date, no oil and gas firm in the country has attained full compliance.
DPR, according to a report obtained exclusively by our correspondent on Monday, recommends that oil firms should from now be made to pay the stiff charge up till the stipulated deadline.
It, however, added that �with effect from January 1, 2008, any field that continues to flare associated gas should be shut in.�
In its view, the government should not entertain any excuse whatsoever from the exploration and production companies for continued gas flaring after the deadline because of the economic and environmental consequences.
Statistics from the DPR shows that Chevron has the largest volumes of gas flared with in Nigeria with 82 per cent, followed by ADDAX with 80 per cent; Mobil, 39 per cent; NAOC, 25 per cent; SPDC, 19 per cent; and ELF, 16 per cent.
The government came up with the policy of ending flaring of gas by January 1, 2008, 10 years ago. It was based on an agreement reached with all the stakeholders.
However, the multinationals often cite finance and insecurity in the Niger Delta, as reasons for being unable to meet the flare-out deadline.
Although all the joint venture partners have gas utilisation programmes, they attribute the challenge of achieving zero flare to the heavy budget cuts, slow approval procedure by the National Petroleum Investment Management Services, the investment arm of the NNPC, and lack of attractive fiscal terms.
In the past, government made several attempts to reduce gas flaring without success. Penalty was even imposed on flaring, while the Petroleum (Amendment) Act of 1973 was also enacted to allow government take associated gas free at flare areas for use by interested parties.
The Association Gas Re-injection Decree 99 of 1984 was also promulgated to achieve flare down by end of 1984.
Some of the reasons given for non-enforcement of the decree included unrealistic time frame for implementation; high cost of gathering and treating associated gas; and lack of suitable depleted reservoir for implementation
Against this backdrop, the Associated Gas Re-injection Decree was amended in 1985, and penalty charge was introduced for fields flaring associated gas.
Furthermore, flaring certificates were issued half yearly to companies on fields that were penalised or exempted for flaring gas.
A report of a recent audit and verification by the Gas Department of the DPR showed that most of the fields, production platforms, flow stations and gas plants did not have adequate metres for measuring gas flared, fuel gas and gas lift among others.