The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has warned investors awarded gas flare sites that they risk losing their permits if they fail to demonstrate significant progress in developing the sites within one year.
The regulator said it would review the performance of investors awarded sites under the Nigerian Gas Flare Commercialisation Programme (NGFCP) and revoke awards where beneficiaries fail to meet the required development milestones.
The NUPRC Chief Executive, Oritsemeyiwa Eyesan, disclosed this during a working visit to the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, in Abuja.
Ms Eyesan said the commission would no longer allow investors to retain flare gas sites without demonstrating tangible progress towards commercialising the gas.
“One year after an award has been granted, the Commission conducts an evaluation to determine whether there has been considerable progress. Where there is insufficient progress, the Commission will take appropriate regulatory action, including revocation of the award where necessary.”
The warning comes as Nigeria seeks to reduce routine gas flaring and convert gas currently being burnt into commercially useful products.
According to the NUPRC, 43 flare gas sites were initially identified for the commercialisation programme, while 27 sites have so far been awarded to investors.
Ms Eyesan said implementation was ongoing at the awarded sites despite resistance encountered during the early stages of the programme.
The NGFCP was established to provide investors with access to flare gas sites so they can develop projects to capture and commercialise gas that would otherwise be burnt during oil production.
The programme is intended to support gas-based industries while reducing environmental pollution associated with routine flaring.
Gas flaring has remained a persistent problem in Nigeria’s oil-producing regions.
Associated gas is often produced alongside crude oil. Where producers lack sufficient infrastructure to gather, process, and transport the gas, it may be burnt at production facilities.
This represents both an environmental problem and an economic loss because gas that could be used for electricity generation, industrial production or other commercial purposes is instead wasted.
Nigeria has more than 215 trillion cubic feet (TCF) of proven natural gas reserves, according to the NUPRC, with an estimated total resource base of about 600 TCF.
The regulator has therefore positioned gas commercialisation as a way of turning a longstanding environmental liability into an economic asset.
The latest regulatory warning comes as the Federal Government pushes to achieve its target of ending routine gas flaring by 2030.
The Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, called for faster implementation of the country’s gas commercialisation programme.
“The core objective is to add value to our gas resources by converting them into critical products and services. We must move away from environmental pollution and toward productive resource utilisation,” Mr Ekpo said.
The emphasis on project execution reflects a longstanding challenge in Nigeria’s petroleum sector: translating policy and regulatory initiatives into actual infrastructure and commercial production.
For the flare gas programme to achieve its objectives, investors must develop facilities capable of gathering, processing and transporting gas to markets where it can be used.
Ms Eyesan also briefed the minister on the implementation of the Host Community Development Trust framework established under the Petroleum Industry Act.
She said 173 Host Community Development Trusts had been incorporated, of which 147 had received funding.
More than 1,001 projects are currently ongoing, while over 200 projects have been completed and commissioned across host communities, according to the NUPRC.
The framework was introduced to ensure that communities hosting oil and gas operations receive a more direct share of the benefits from petroleum activities.