Chevron Corp cannot stop flaring gas from its oil fields in Nigeria this year without shutting production, as the government has been unable to repair key infrastructure, a company executive said on Tuesday.
“Our flares are continuing to be put out. We will continue to ratchet those down, but 2008 is not achievable without the shut-in of oil fields,” said Fred Nelson, chairman of Chevron Nigeria.
Companies face hefty government fines if they fail to halt gas flaring from Jan. 1, and noncompliant oil fields could be shut down by the end of the year. The industry wants Nigeria to move the deadline to 2010.
Gas flares burning day and night are a health hazard to nearby communities and contribute to global warming, environmentalists say. They are also a waste of resources.
Nelson said the National Gas Co (NGC) has had trouble repairing a gas pipeline connected to Chevron’s Escravos oil fields more than two years after it was blown up.
“If we get the NGC line fixed, we will be ramping down our flares. Escravos will be a much darker place tomorrow than it is today,” he told reporters.
“But we have more work to do to get the other flares down.”
Nelson estimated it would take about $5 billion to stop gas flaring.
Oil companies in Nigeria flare about 2.5 billion cubic feet of gas per day because there is not enough infrastructure to make use of it. Only Rusia flares more gas than Nigeria.