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Gas Flare: ‘Negotiation’ll achieve more results for Nigeria’

Adoption of negotiation by the Federal Government with oil and gas companies in Nigeria could be a more potent strategy to reduce or eliminate the multi-billion dollar gas flare losses incurred by the country.

While advocating for this strategy, Executive Secretary of the Major Oil Marketers Association of Nigeria, (MOMAN) Mr. Clement Isong, said the losses were painful, adding negotiation would achieve results than continued application of sanctions.

The Nigerian Oil Spill Detection and Response Agency (NOSDRA) in its report revealed that Nigeria from 2011 to 2021 lost over $22.9 billion to gas flaring.

Director of Information and Communication Technology (ICT) NOSDRA, Mrs. Margaret Adeshida, during an interactive forum with delegations from Nigeria Upstream Regulatory Commission (NUPRC), also underscored the imperativeness for proper monetisation of gas flaring in Nigeria.

She said that the nation flared more than 4.2 billion standard cubic feet of gas leading to its loss of more than $14.6 billion from 2012 to 2021. According to her, this is in addition to $8.3 billion loss in penalty for the wastage totalling $22.9 billion dollars loss within the same period. Isong said reducing or eliminating gas flare was in tandem with the Net Zero target, adding that it had become a moral obligation for defaulting companies to adopt measures for full compliance.

According to him, “it is painful to everybody, not just Nigeria but everybody who is involved will feel that there is so much to be gained if we are able to capture this gas and benefit from it. It is better for everybody. I am sure we were in the same mindset. It is painful.

“We tried to do it by penalising and sanctioning. We are trying to force it with limited success but it is true that the world has moved against the flaring of gas with all the drive towards Net Zero. So there is an opportunity to discuss and negotiate with all the companies that are involved in this. Negotiation is always the best way to arrive at results that are mutually beneficial. I think it is an opportunity to have a good discussion with the industry.

“They are under pressure as well to reduce gas flaring not just because our laws are against it, but it is a moral obligation because of what is happening to the world, what is happening with global warming and the focus and contributions by energy companies towards the reduction of greenhouse gases. It is a perfect opportunity for us to have meaningful discussions and encourage them to close the gaps in a shorter time.”

He explained that the problem with penalties was that the energy companies would just work in the additional cost into their prices and that it is as if the focus is on the money, whereas the focus should be on beneficiating the gas.

He added that the focus should be on preserving the environment.

“This is what negotiation allows you to do. Sometimes in business, it looks as if the regulator or the government is more focused on penalties and pocketing the money whereas governments by their nature are usually more interested in the well-being of the citizens. So if for us, I think the preservation of the environment and the beneficiation of the gas are higher on the priority list of the government than collecting the money from the penalties.

“So it is an opportunity for them to demonstrate that by agreeing on timelines as to when where and how this will be closed. I know some companies are more aggressive than others because of pressure more from their head offices, than from locals.

“In MOMAN we no longer threaten the government. We sit with them, we explain to them the challenges and what we think. Through continuous engagements and discussions, we have made more progress than all the days we used to issue threats.

“Discussions are better. So long as when you are coming to the table, you are also coming with a good heart and developmental attitude, it is better. You will find that in reaching an accommodation, it is much easier.”

“Oil companies should remotivate themselves, and push themselves again. Let us do what we must do in order to align ourselves with the developmental interests of our host communities,” he added.

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