Emmanuel OchayiThe Nigerian Gas Flare Commercialisation Programme (NGFCP) is projected to inject over $1 billion into the country’s Gross Domestic Product (GDP).
This revelation comes from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which has been at the forefront of this transformative initiative. The NGFCP, with its multifaceted benefits, is poised to reshape Nigeria’s economy, from job creation to environmental preservation.
Join our WhatsApp ChannelNigeria, as one of the world’s top gas-flaring nations, faces a growing challenge. A report by the World Bank estimated that approximately 2 million Nigerians live within close proximity of gas flare sites, which have adverse environmental and health implications. However, the NGFCP is poised to make a significant difference.
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Last month, the NUPRC announced a development: 42 indigenous oil and gas companies had won bids for 49 flare sites in the 2022 NGFCP, marking a new chapter in hydrocarbon exploration in Nigeria. These flare sites represent an opportunity to reduce gas flaring and associated carbon emissions, an urgent need in the fight against climate change.
During an inaugural NGFCP post-award forum last week, the NUPRC and successful bidders discussed the importance of environmental preservation, waste reduction, decarbonization, and supporting Nigeria’s energy transition and climate goals.
The NUPRC emphasized that, through the awarded flare sites, Nigeria is expected to reduce gas flaring by 250-300 million standard cubic feet per day (MMscfd), which is approximately 40% of the nation’s total flare, resulting in a yearly reduction of about 6 million metric tonnes of carbon dioxide emissions. This environmental achievement aligns with Nigeria’s efforts to address climate change.
Furthermore, the NGFCP is expected to provide additional revenue streams for the government, including taxes from new ventures and auction fees. It is anticipated that the program could generate between $70 million to $100 million annually from the sale of flare gas, in addition to tax revenues.
The NUPRC emphasized the holistic impact of the NGFCP, including direct and indirect employment opportunities, the development of cottage industries, enhanced well-being in producing regions, and improved social acceptance of gas operations. When considering these factors collectively, the NGFCP’s total GDP impact could surpass $1 billion.
“It is however anticipated that the commission will generate between $70 million to $100 million per annum from sales of flare gas in addition to tax revenues.
“More important though is the aggregate value to the economy that the programme affords. Think of the multiplier effect of the NGFCP, including employment generation – direct and indirect, creation of the cottage industry and other economic activities around flaring communities.
“(These also include) improved health and social economic well-being in producing areas, enhanced social licence to operate, amongst others. When considered holistically, the total GDP impact of implementing the NGFCP could be well over $1 billion,” it stated.
The NUPRC reaffirmed its commitment to implementing the program with the support of relevant stakeholders and its regulatory mandate for ongoing flare projects outside the NGFCP. It aims to ensure the successful completion of these projects for similar benefits.
As Nigeria moves forward with the NGFCP, the Commission intends to sustain its momentum and leverage the support of stakeholders who recognize the program’s overall value for the nation’s economy and the environment. The Commission also emphasized its dedication to safeguarding the program’s integrity and Nigeria’s reputation on the global stage.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
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