The regulation asserts the right of the gov-
ernment, under Section 9 of the Petroleum
Act, to take natural gas produced with
crude oil free of cost at the flare site and
without payment of royalty. The provision
of this regulation is applicable to all petro-
leum licenses, including marginal fields.
Two key aspects of the regulation are the
outlines of Bid Processes and the Penalties
for supply of inaccurate data by a producer
of flared gas.
The minister may, by a permit to access
flare gas, authorize a Qualified Applicant se-
lected further to competitive bid processes
conducted by the Federal Government, to
take Flare Gas on behalf of the government
at any Flare site as specified in the permit.
Any producer may apply to the minister to
utilize Flare Gas for commercialization, pro-
vided that such application shall (a) exclude
any Flare Gas volume that is being offered
in a bid process conducted by the Federal
Government or has been assigned to a per-
mit holder, (b) be made by the producer on
behalf of a midstream subsidiary corporate
entity, either existing or to be incorporated.
Nigeria flares an excess of 800Million stan-
dard cubic feet of gas a day from 178 flare
sites, according to the Ministry of Petro-
leum Resources. The country’s power sec-
tor, however, struggles to get enough gas
to fire the turbine capacity of 7,000MW.
The government is hoping to use the regu-
lation to bring more investment into the
natural gas market. To achieve this, minis-
try sources say, there is need for improved
oilfield practices and improved regulatory
supervision. The new regulation contains
higher penalty for gas flaring than current-
ly obtains and contains an overwhelmingly
large number of references to “The Quali-
fied Applicant” and “Permit Holder” of Flare
Gas sites, two entities that are largely un-
known in extant Nigerian Petroleum eco-
system.
The regulation says that the Department
of Petroleum Resources may request a pro-
ducer to provide Flare Gas Data and when
that request is made, the producer shall
provide such Flare Gas Data in the format
required within 30 calendar days of the
date of the request.
In the last 18 months, the MPR has called
for data twice from flare gas producers. The
Ministry will call again for data after the
regulation has been gazetted.
Any individual, in any company, that signs a
letter conveying the data has a duty to en-
sure that the data is accurate. Any person
acting on behalf of a producer, who sup-
plies inaccurate or incomplete Flare Gas
Data to the DPR or any other duly empow-
ered lawful authority, will be liable to crimi-
nal prosecution, the new regulation says.
By Toyin Akinosho via http://africaoilgasre-
port.com
VOLUME
“
Nigeria flares an excess of 800Million standard
cubic feet of gas a day from 178 flare sites,
according to the Ministry of Petroleum
Resources. The country’s power sector,
however, struggles to get enough gas to fire
the turbine capacity of 7,000MW.
11