ERHC Energy Inc (ERHE)

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Gas-flaring: FG Raises Penalty to $100/Mscf
By Chika Amanze-Nwachuku and Fidelia Okwuonu, 10.24.2007


Determined to put an end to gas-flaring by 2008, the Federal Government has raised its penalty from N10 to N12,700 per million standard cubic feet of gas (Mscf), effective from January 2008.
Speaking yesterday at a gas conference, organised by the Nigerian Energy Digest in Lagos, Director, Department of Petroleum Resources (DPR), Mr Tony Chukwueke, said oil companies would only be allowed to flare gas from their oil fields after reaching an agreement with the Federal Government to pay $100/Mscf.
He said when the policy will be enforced on January1, 2008, $500/Mscf would be paid by oil firms for false declaration of volume of gas flared, and warned that “no excuse will be tolerated from any oil firm flaring gas without the approval of the Federal Government."
He said the policy is part of the new measures put in place by the government to stop oil producing firms from flaring associated gas and ensure strict compliance with the 2008 deadline, adding that Associated Gas (AG) flare down was an agreement reached with captains of oil and gas industry in 1998.
According to him, oil and gas stakeholders agreed with the Ministry of Environment that they would achieve flare down by 2004, but that his department knowing the complexities of achieving the task, extended the deadline to 2008.
He, however, explained that the AG re-injection decree would be further amended before the January 2008 date, to ensure success of the policy, contrary to failure of Decree 99 of 1979, promulgated to encourage gas re-injection and achieve flare down by January 01, 1984