Loss of $2.5bn Annually in Nigeria Oil And Gas Sector Through Gas Flaring

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In the Oil and Gas sector, in spite of efforts of the Federal Government and operators, Nigeria is currently losing $2.5 billion yearly as a result of severe gas flaring from 178 flare sites nationwide, a development expected to hit $9 trillion in the next 10 years.

The relatively high flaring has been attributed to many factors, including lack of infrastructure at some oil fields, the limited number of reservoirs suitable for gas re-injection, expensive nature of developing and installing of pipeline network, limited local, regional and international market and difficult terrain of the Niger Delta, which hinders the harnessing of the product for constructive usage.

Consultant (Oil and Gas), Private Design Engineering, Dr Wisdom Patrick Enang, who made the disclosure in his presentation – Natural Gas: Nigeria’s Next Big Thing – at the just concluded Nigeria International Petroleum Summit, NIPS, in Abuja, said many investment opportunities exist in the different sub-sectors, especially Compressed Natural Gas, Liquefied Petroleum Gas and Liquefied Natural Gas

He disclosed that the Federal Government has already provided some incentives – Tax rate under petroleum profit tax (PPT) act to be at the same rate as company tax which is currently at 30 per cent, Capital allowance at the rate of 20 per cent yearly in the first 4 years, 19 per cent in the 5th year and the remaining 1 per cent in the books, Investment tax credit at the current rate of 50 per cent; Royalty at the rate of 7 per cent onshore and 5 per cent offshore – as incentives to attract and retain serious investors in the oil and gas sector.






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