Gas Flare-out: Stakeholders Identify Funding, Fiscal Policies As Hindrances

Three major issues which include funding, lack of country-wide gas infrastructure and fiscal policies critical to gas development have been identified as hindering the attainment of zero gas flare-out agenda in Nigeria. This position was contained in a communique issued at the end of the pre- conference workshop at the 2014 annual conference and exhibition of the Nigerian Association of Petroleum Explorationists (NAPE) held in Lagos. The Minister of Power, Prof. Chinedu Nebo, Director, Department of Petroleum Resources (DPR), George Osahon, Dr. David Ige, Group Executive Director, Gas and Power, Nigerian National Petroleum Corporation (NNPC) were among participants at the Pre-Conference workshop which focused on the topic “Driving Gas Flare-out in Nigeria.”

The communique which was read by the chairman, Pre-conference Workshop, Mr. Nosa Omorodion, fnape while applauding government for the current development in gas prices, infrastructure development and power reforms, recommended that appropriate funding mechanism be put in place to encourage investment. It also noted that “unless in cases where it makes sense for government social responsibility, the gas value chain and pricing should be driven by market forces and accelerated to a willing-buyer/ willing-seller status”. It further pointed out that the current Petroleum Industry Bill (PIB) draft which proposes to tax gas like oil, will be inimical to gas development and, therefore, be reconsidered, while recommending “the adoption of a proposal to establish incentives as opposed to sanctions as a way of supporting gas development.”

The communique urged government to put in place incentive to encourage aggressive exploration for gas in the frontier areas to increase long term sustainability and added that “government expedite action on the establishment of the planned backbone infrastructure development and then transit out of infrastructure development through public private partnership thereafter”. The communique also pointed out that existing legal framework for gas, as it is today, remains inadequate to encourage enforcement of flare out and infrastructure development.

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