Nigeria it will strengthen the supervision of projects aimed at utilizing gas currently flared and may withdraw awards when investors do not demonstrate sufficient progress. The measure seeks to accelerate the execution of initiatives already allocated, ensure that sites move into an effective development phase and prevent them from remaining stalled for long periods without concrete results.
Nigeria tightens control over gas projects
Nigeria will increase pressure on investors responsible for developing projects intended to harness the gas burned in a torch in the country’s oil fields. Authorities may revoke awards if initiatives remain stalled after the established period for evaluating their progress. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) will review the progress of each project one year after its award. With this evaluation, the agency will verify whether the assigned sites are actually progressing towards implementation.
Oritsemeyiwa Eyesan, executive director of the NUPRC, explained that the Commission will analyze whether significant progress has been made during that period. In cases where the results are insufficient, the regulator may take action, including withdrawing the award. In this way, Nigeria seeks to prevent the rights to the projects from gas burning remain for long periods in the hands of investors who do not demonstrate the ability or willingness to develop them.
The NGFCP program seeks to utilize flare gas
Furthermore, the measure is part of the push to Nigerian Gas Flare the Commercialisation Programme (NGFCP), an initiative created to capture and market the gas that currently ends up being burned during oil production operations, would take advantage of this resource to reduce emissions associated with burning and, at the same time, convert significant volumes of wasted gas into a source of economic value.
Currently, 27 of the 43 gas flaring sites identified within the program have already been awarded to investors, according to data reported by Eyesan. The projects are at different stages of development, the NUPRC’s intention is that these awards will translate into real investments, job creation, and emissions reduction, rather than remaining as inactive projects.
Nigeria aims to end routine gas flaring by 2030
Furthermore, strengthening oversight is directly related to Nigeria’s goal of ending the routine gas burning by 2030 during oil extraction, associated gas can be produced, which often ends up being burned when there are insufficient facilities to capture, process, or transport it. The projects developed under the NGFCP aim to recover these volumes and allocate them to commercial uses.
The strategy takes on special relevance due to the size of the country’s gas resources, Nigeria has more than 215 trillion cubic feet of proven gas reserves this places it among the nations with the largest reserves worldwide. Furthermore, the Nigerian government considers gas an important fuel to support electricity generation and industrial development as it advances its energy transition.
The permits will depend on the progress of the investments
In this context, the NUPRC’s warning establishes stricter requirements for investors who received sites under the commercialization program. Having an award will no longer be sufficient to maintain a project indefinitely; companies will have to demonstrate concrete progress that justifies the continuation of their permits when the regulatory review comes around.
With this mechanism, Nigeria aims to accelerate the transformation of torch gas in a commercial resource and to progressively reduce the volumes wasted during oil production, the measure also links regulatory compliance with the economic and environmental objectives of the Nigerian upstream sector. For investors, this means that their continued participation in the program will increasingly depend on their ability to convert the awards received into effectively operational projects.
Source: Reuters
Photo: Shutterstock
