New Bill on Gas Flaring prescribes punishment for oil companies which flares gas in the course of production in Nigeria

AFTER many years of dilly-dallying, the Senate has finally passed the bill for an Act to Prohibit Gas Flaring (prohibition and punishment) in Nigeria.

The bill, which passed second reading in 2017, also contains provisions on inaccurate data collation and submission by the lessee, gas flaring fee, powers of the minister to make regulations, as well as repeal of the Associated  Gas Re-Injection Act 2004.

The Senate has approved that any person who is acting on behalf of a licensee to supply inaccurate data to the Department of Petroleum Resources or to any other person duly empowered by a lawful authority, commits an offense and shall be liable upon conviction to a fine of N10 million or to imprisonment for a maximum term of six months or to both fine and imprisonment.

The Senate also approved that where the Minister grants an extension to an exemption granted under section 4(1)(b) of the Act,  the fee payable by the lessee or licensee under sub-section(1) of this section shall attract a surcharge on the total volume of gas flared  as follows:10% during the first year; 15% during the second year;20% during the third year and 25% during the fourth year and for  every subsequent year.

After a clause by clause consideration by the Senate, the Bill was read the third time and passed.

According to the approved report, where 10,000 barrels or more of oil is produced per day, in any lease or license area, the lessee  or licensee  shall be liable to the Federal Government  for a minimum flare payment of $2.00 (Two  United States Dollars) or its equivalent  in naira at the prevailing exchange rate per thousand standard cubic feet of gas flared within such lease  or licence area, irrespective of whether the flaring is Routine or Non- Routine  Flaring; provided however, that there shall be no liability for the payment  where the flaring was caused by an Act of war, community disturbance, insurrection, storm, flood, earthquake or other natural phenomenon which is beyond the reasonable control of the lessee  or licensee.”

Among others, the bill seeks to ensure that natural gas shall not be flared or vented in any oil and gas production operation, block or field, onshore or onshore, or gas facility which shall commence operations after the commencement of the Act.

With the passage, it will now be ensured that no operator shall establish an oil and gas facility in Nigeria without obtaining authorisation from the minister for the design phase, the commissioning and the production phases. It equally seeks to ensure that natural gas is not flared or vented in any oil and gas production operation, bloc or field, onshore or onshore, or gas facility. The bill also seeks to ensure that no operator shall establish an oil and gas facility in Nigeria without obtaining authorisation from the minister for the design phase, the commissioning and the production phases. The bill consists of 22 sections and includes sections on sanction for inaccurate data collation and submission by the lessee, gas flaring fee, powers of the minister to make regulations, as well as repeal of the Associated  Gas Re-injection Act 2004. The bill also seeks to ensure that natural gas shall not be flared or vented in any oil and gas production operation, block or field, onshore or onshore, or gas facility which shall commence operations after the commencement of the Act. The bill was referred to the committee on Gas for further legislative action after it passed through the second reading in 2017. The Committee thereafter invited industry stakeholders and the general public to a public hearing on Wednesday, May 31, 2017. In his remarks, Senate President, Dr. Bukola Saraki put the bill to voice vote and it was carried. – Vanguard

– Apr. 17, 2019 @ 10: 58 GMT |