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NIGERIAN CRUDE OIL AND GAS.
Nigeria loses $ 2.5bn yearly to gas flaring
The Federal Government has been called upon to review and amend the
existing laws regarding the activities and setting up of gas companies
in the country.
The Gas Monitoring Committee of the Revenue Mobilization Allocation and
Fiscal Commission made this call amid revelation that Nigeria loses $
2.5 bn annually as a result of gas flaring. The committee therefore
stressed the need for the Federal Government to urgently review its
equity shareholding in the gas companies operating in Nigeria,
especially the sale of 11 % equity share holdings in Nigerian Liquefied
Natural Gas (NLNG).
Chairman of the Committee, Chief Emmanuel Nsa observed that some of the
provisions of the decrees setting up some of the gas companies have
become anachronistic to the 1999 constitution and the fiscal laws now
operating under the democratic environment.
According to him, Nigeria is blessed with massive reserves of gas
estimated in excess of 160 tcf which is sufficient for over 100 years.
He however lamented that despite the high reserve base found without
much exploration efforts, gas utilization has remained low. The result,
according to him, is that most of the gas is being flared with the
attendant environmental degradation and loss of huge revenue.
He noted that since 1999 when gas production actually commenced, till
date, the country which has major equity share in these companies has
little or nothing to show in terms of revenue into the federation
account.
"It is indeed disheartening that (NLNG) since its inception in 1999 paid
dividends only once in 2004, and the said share of dividends of about $
686 mm was never paid into the federation account. This is in spite of
the fact that the auditors report of the company revealed that the
revenue of the company has been on the increase. Thus as far as we are
concerned, the country has not been benefiting from the revenue accrued
to the company", he averred.
Nsa pointed out that since its inception, the company earned $ 10 bn to
which it paid $ 4 bn as loans, adding that the sum of $ 1 bn was assumed
to have been retained but NNPC did not indicate how much was remitted
into the federation account.
"NNPC should ensure that what is due for the Federal Government is
channeled to the federation account. Since 1999, the country has not
benefited from gas. We are urging NNPC to check the activities of multi
national companies, they said some of the money have been reinvested,
thus what we are saying is let the stakeholders take decisions on their
resources", Nsa said.
