Nigeria is losing between $500m and $1bn revenue as a result of the falsification of gas flare data by international oil companies, the Federal Government has said.
According to the government, the IOCs falsify gas flare data in a bid to avoid or cut down on the payment of the required penalties for flaring gas, adding that this had deprived the country of huge revenue.
The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, disclosed this in Abuja on Tuesday at the Gas Competence Seminar, which had the theme: ‘Towards ending gas flaring and unlocking gas potential in Nigeria’.
To address the situation, the minister declared that by 2017, the Federal Government would set up an independent tracking mechanism to ascertain the actual volume of gas being flared in the country.
He said, “There is an urgency of yesterday to drive the policy that will enable us to get out of gas flaring. I hear you talking about 10 per cent non-compliance, meaning that we have achieved a 90 per cent factor. My gut feeling is that these numbers are mistaken.
“Beginning next year, we will be putting up an independent tracking mechanism, not relying on figures from the IOCs and from the DPR (Department of Petroleum Resources), to find out really what is the flare volume. My feeling is that there is a lot of management of those figures to suit the cap of the penalties being charged.”
Kachikwu added, “My take is that we lose over half a billion dollars to $1bn of government revenue looking at the basis of the present penalty position. Nobody is effectively monitoring the volume; so, when you actually go for the real effect of what is flared, in terms of statistics, it is much higher than those figures.
“However, we must appreciate the efforts that have been done in the past; efforts to increase penalties, among others.”
The minister also noted that the marginal rise in the price of crude oil in the past few days was not an indication of an imminent boom in the cost of the commodity in the nearest future.