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tolu ogunlesi @toluogunlesi
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Some oil industry news. In July 2018 President Buhari approved new Gas Flaring Regulations for Nigeria -- The Flare Gas Reduction (Prevention of Waste and Pollution) Regulation 2018.
thisdaylive.com/index.php/2018…

Here are the implications - as well as economic opportunities.
#Thread
These new Gas Flare Regulations set out the legal basis/framework for something called the Nigerian Gas Flare Commercialization Programme (NGFCP) - which was approved by FEC in 2016 and launched by Minister @IbeKachikwu in December 2016
The Nigerian Gas Flare Commercialization Programme (NGFCP) seeks to end Gas Flaring in Nigeria by 2020, while also ensuring that Nigeria is able to monetize flared gas on a commercial basis. Multiple benefits: jobs, investment, climate, gas-to-power, etc.
The new regulations increased the penalties for gas flaring from N10 PER thousand standard cubic feet to:

US$2 - for companies producing 10,000 barrels of oil or more

US$0.50 - for companies producing less than 10,000 barrels of oil per day
There are also mandatory additional payments of $2.50 per thousand standard cubic feet for failure to produce accurate flare data, or failure to provide access to flares or flare sites etc.

Clearly, big disincentives for gas flaring
But even more important than the punitive aspect is the commercial investment aspect -which is what NGFCP is all about

Accord to NGFCP, Nigeria currently flares about 700-800m cubic feet of gas per day, roughly equivalent to what the power sector consumes
ngfcp.gov.ng/news-and-event…
So, under NGFCP, @AsoRock is licensing private sector players as off-takers of the Gas currently being flared. End November 2018, the Bidding Round opened. Acc to @aogrmagazine it is Nigeria's "first such auction for licensing of subsurface hydrocarbon property in 11 Years."
The Bidding is for Gas Flare Sites. Potential investors/bidders are being asked to "register and apply for the issuance of the Request for Qualification (RfQ) package which will lead to the submission of statements of qualification (SOQs) ... for participation in the [NGFCP]..."
According to this story from earlier this week in the New Telegraph, the response to the NGFCP Bidding Round has been quite enthusiastic: newtelegraphng.com/2018/12/12-fir…
According to the NGFCP, "The auction presents a significant opportunity for domestic and international developers alike to participate in the largest market driven flare gas monetization program undertaken on this scale globally." africaoilgasreport.com/2018/12/farm-i…
So in a nutshell Nigeria is auctioning Gas Flare Sites. "Bidders will have flexibility of choosing which flare site(s) to bid for, determine the gas price, and their end-use market or gas product, as well as the technology to be deployed."
africaoilgasreport.com/2018/12/farm-i…
Successful investors will be required to develop & monetize the gas currently being flared. Here are Commercialisation/Monetization options envisaged by the NGFCP:

Great news for industries and businesses - cheaper fueling costs.
Also great news for power & petrochemical sectors
Nigerian Gas Flare Commercialisation Programme -- Programme Information Memorandum (November, 2018): ngfcp.gov.ng/media/1123/ngf… (pdf)
And here is the Gazetted Copy of the Flare Gas (Prevention of Waste and Pollution) Regulations 2018, approved by President @MBuhari in July 2018 -- the legal framework for the implementation of the NGFCP:
ngfcp.gov.ng/media/1120/fla… (pdf)
Thank you for coming to my short talk. You will find popcorn and zobo in the seat pockets in front of you.

For those still thinking about putting in Bids for the NGFCP, what are you waiting for?
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