The Federal Government, Monday, said it would commence the revocation of the licences of oil companies that failed to stop flaring of gas in their operations in the country from next year.
Speaking at the 2018 Buyers’ Forum/Stakeholders’ Engagement organised by the Gas Aggregation Company of Nigeria, GACN, Mr. Ibe Kachikwu, Minister of State for Petroleum Resources, also stated that the Federal Government would launch the infrastructure revamp programme in November.
The programme, according to him, has the potential to attract between $20 billion and $30 billion of investments into the petroleum industry and also help address the infrastructural deficiencies in the industry.
On the gas flare issue, Kachikwu revealed that the Federal Government had been locked in a battle with upstream oil companies over the issue, explaining that government was keen on ending flaring.
He, however, lamented that oil companies still give a lot of reasons gas flaring could not be ended.
According to him, the bottom line of the disagreement the oil firms have with the government on ending gas flaring is cash call and money.
He said: “Government wants to end flare, oil companies still give lot of reasons flare cannot be ended. Bottom line is cash call and money.
”But the reality is that whether or not we deal with cash call issues, it is not an optional agenda, it is a compulsive immediate agenda. It is destructive to the populace; it is intolerable in developed countries and it should not be tolerable here either.
“Any oil company that cannot find a way to ending its flare ought not to be producing. And I have said to the Department of Petroleum Resources, DPR, beginning from next year.
”We are going to get quite frantic about this and companies that cannot meet with extended periods — the issue is not how much you pay in terms of fines for flaring, the issue is that you would not produce. We need to begin to look at foreclosing of licences. This is very urgent.”
Kachikwu stressed that the quest to discourage gas flaring led the Federal Government to initiate the gas flare commercialisation programme.
He stated that future renewals of oil and gas licences would involve the assessments of the gas components and gas flare rate of each company seeking renewals.
“Some of the ones that have come recently for renewals have insisted that they are building massive gas processing plants and we are going to follow this right through so that the supply obligation, the processing facility, the treatment of gas; their submissions are very accurate and very aggressive,” he noted.
Kachikwu emphasised the need for a critical implementation of the Domestic Supply Obligation, which would be extended to Domestic Supply and Processing Obligation for both gas and crude oil.
He stated that the country needed to move away from the point of just producing these commodities, throwing it into the vessel and shipping it out, to the point of processing as much of it locally as much as possible.
According to him, ”only through this would we be able to create more jobs, create better profit and returns on investments, achieve better pricing and address the challenges of local industries and industrialization.”
Also speaking, Mr. Morgan Okwoche, Managing Director of GACN, called for increased support for the company, while he highlighted the need for optimum collaboration among industry players in the development of the gas sector.
