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Monday, September 24, 2018

GAS FLARING: FG vows to begin revocation of licenses next year

…to launch Programme to attract $30b investments

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu’ Monday vowed that the Federal Government would from 2019, withdraw the licenses of oil firms that refuse to stop gas flaring in Nigeria.
He dropped the hint at the 2018 Buyers’ Forum/Stakeholders’ Engagement that the Gas Aggregation Company of Nigeria (GACN) organized in Abuja.

He added that the Government would launch the infrastructure improvement programme in November, which has the potential of attracting between $20 billion and $30 billion of investments into the petroleum industry and also help address the infrastructural deficiencies in the industry.
The minister explained that there has been a Cold War between the Federal Government and the upstream oil companies as a result of gas flaring.
He noted that while the government has been eager to bring the menace of gas flaring to an end, the oil firms are full of excuses for continuing the flaring.
According to him, the bottom line of the disagreement the oil firms had with the government on ending gas flaring was cash call and money.
He said, “Government wants to end flare, oil companies still give lot of reasons why flare cannot be ended. Bottom line is cash call and money. But the reality is that whether or not we deal with cash call issues, it is not an optional agenda, it is a compulsive immediate agenda. It is destructive to the populace; it is intolerable in developed country and it should not be tolerable here either.
“Any oil company that cannot find a way to ending its flare ought not to be producing. And I have said to the Department of Petroleum Resources, DPR, beginning from next year, we are going to get quite frantic about this and companies that cannot meet with extended periods — the issue is not how much you pay in terms of fines for flaring, the issue is that you would not produce. We need to begin to look at foreclosing of licences. This is very urgent.”
Kachikwu stressed that the quest to discourage gas flaring led the Federal Government to initiate the gas flare commercialisation programme.
In addition, the minister disclosed that future renewals of oil and gas licences would involve the assessments of the gas components and gas flare rate of each company seeking renewals.
“Some of the ones that have come recently for renewals have insisted that they are building massive gas processing plants  and we are going to follow this right through so that the supply obligation, the processing facility, the treatment of gas; their submissions  are very accurate and very aggressive,” he noted.
Kachikwu further emphasized the need for a critical implementation of the Domestic Supply Obligation, which would be extended to Domestic Supply and Processing Obligation for both gas and crude oil, stating that the country needed to move away from the point of just producing these commodities, throwing it into the vessel and shipping it out, to the point of processing as much of it locally as much as possible.
According to him, only through this would we be able to create more jobs, create better profit and returns on investments, achieve better pricing and address the challenges of local industries and industrialization.
Also speaking, Managing Director of GACN, Mr. Morgan Okwoche, called for increased support for the company, while he highlighted the need for optimum collaboration among industry players in the development of the gas sector.

[C] The Nation 

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