…As oil, gas firms waste $1.1bn gas in five months
Nigeria’s gas flaring has surged to its highest level in four years, raising concerns about the country’s commitment to climate goals and exacerbating the energy challenges faced by domestic industries reliant on natural gas.
According to data obtained from the Nigerian Oil Spill Monitor and corroborated by the National Oil Spill Detection and Response Agency (NOSDRA), oil and gas companies operating in Nigeria flared an estimated 301.1 million standard cubic feet (scf) of gas in 2024.
An analysis of gas flaring data from NOSDRA revealed that Nigeria lost an estimated $1.1 billion in potential revenue due to flared gas. Of this, only $602.2 million is recoverable as penalties, representing just 54 percent of the total value that could have been earned.
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Further analysis showed that between January and May 2025, the country flared 154.1 million scf of gas, marking the highest volume of flared gas recorded in the first five-month period since 2020.
This surge in flaring comes despite the federal government’s commitment to end routine gas flaring by 2030 under the Nigerian Gas Flare Commercialisation Programme (NGFCP).
Gas flaring, the burning of natural gas associated with oil extraction, contributes significantly to greenhouse gas emissions. Nigeria, Africa’s top oil producer, has pledged to end routine gas flaring by 2030 under the World Bank’s Zero Routine Flaring Initiative, yet progress has been sluggish.
Reason for rising gas flaring
Industry analysts attribute the increase to a combination of aging infrastructure, poor enforcement of environmental regulations, and delays in implementing gas commercialisation policies.
“The NGFCP of 2016 and the Gas Flaring, Venting, and Methane Emissions Regulation of 2023 are significant initiatives aimed at ensuring local gas availability in various forms to improve the standard of living in Nigeria and boost the country’s GDP,” said Oyinkepreye Orodu, a subface and energy researcher.
“However, are we truly prepared for significant gas uptake and usage, especially considering the ‘Decade of Gas’ initiative from 2020 to 2030, with 40 percent of this period already elapsed and little tangible progress in flare reduction?” he queried.
According to him, it is imperative that the government takes extraordinary measures to ensure the success of this initiative. “Indeed, these policies and regulations have prompted the exploration and production industry to initiate gas collection efforts.
Energy-starved manufacturers
The rise in flaring comes at a time when local manufacturers are grappling with soaring energy costs, gas shortages, and erratic power supply – factors that have forced many to scale down operations or shut down entirely.
Many gas-fired power plants are operating below capacity due to fuel shortages, leading to widespread blackouts. The Transmission Company of Nigeria (TCN) confirmed that reduced gas supply has slashed electricity generation, leaving distribution companies with less power to deliver to homes and factories.
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Earlier, Nigeria had taken a step towards redefining its energy future as key stakeholders, industry leaders, and policymakers convened in Abuja at the 2025 Gas Turbine Asset Management Conference with the theme, ‘Powering the future – One Upgrade at a Time.’
Daere Akobo, chairman of PANA Holdings, highlighted the gap between Nigeria’s installed power capacity, estimated at 12,000 megawatts, and the actual utilised output, which lingers around 4,500 megawatts, emphasising the critical role of gas turbines not just as utility for power generators but as core enablers of economic resilience as Nigeria continues its quest for reliable and scalable electricity.
“Reliable electricity is the lifeblood of economic growth and bridging this gap demands immediate, systemic reform, beginning with the reinstatement of the Presidential Power Initiative,” Akobo said.
He proposed the formation of an independent, privately-led Energy Council.
“This non-profit body would be composed of volunteer experts offering advisory support to government institutions, aimed at ensuring consistent, technically sound reforms in the energy space,” he added.
Potential shortfall
Meanwhile, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has warned that gas demand is growing at 16.6 percent annually, and the country could face a 3.1 billion cubic feet per day shortfall by 2030. Despite major projects like the Nigeria-Morocco pipeline and AKK pipeline, supply may still fall short.
The Nigerian Gas Flare Commercialisation Programme (NGFCP), originally launched in 2016 to monetise flared gas and attract investment into gas utilisation projects, has faced multiple delays and implementation challenges. Efforts to revive the programme have seen limited success, with only a handful of investors able to bring projects to financial close.
Gas flaring remains criminal offense
Under Section 104 of the Petroleum Industry Act (PIA), gas flaring is deemed a criminal offence, except in cases of emergencies, where exemptions are granted by the NUPRC, or when flaring is permitted as a safety measure under approved regulations.
Section 107 of the PIA allows the NUPRC or the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to issue permits for gas flaring or venting under limited circumstances. These include facility start-ups or specific operational needs, such as equipment testing or other strategic activities, for a defined period.
The 2023 Gas Flaring, Venting, and Methane Emissions (Prevention of Waste and Pollution) Regulations set out penalties for unauthorised flaring. Regulation 12(2e) specifies that gas flaring may only proceed if it stays within the limits approved by the NUPRC.
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Jide Pratts, country manager at AIONA, emphasised the need for large-scale gas capture and utilisation, citing the Ajaokuta-Kaduna-Kano (AKK) pipeline as a vital infrastructure project. He also stressed the importance of enhancing Nigeria’s gas export capacity.
For Orodu, the Nigerian gas market presents strong prospects. He highlighted the ongoing shortage of Liquefied Petroleum Gas (LPG) for household use, the rising potential for compressed natural gas (CNG) adoption, and investment opportunities in converting gas to chemicals.
“I believe that the awardees from the bidding process for flare gas commercialisation are mostly small, local players. Securing adequate financing may be a herculean task, given the high interest rates and uncertainties surrounding loan acquisition for oil and gas projects,” he added.
