By staff Reporter Rukevwe Odeh

The Federal Government has warned that investors who fail to make meaningful progress on projects awarded under Nigeria’s gas flare commercialisation programme could lose their licences.

The warning was issued by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) as the country continues to grapple with persistent gas flaring despite collecting hundreds of billions of naira in penalties from oil and gas producers.

NUPRC disclosed that it generated about N521.87 billion in gas-flaring penalties in 2025, representing 74.57 per cent of its annual target of approximately N699.84 billion.

Despite the significant financial penalties, gas flaring remains a major challenge, raising concerns over whether fines alone are sufficient to compel operators to invest in facilities capable of capturing and commercialising associated gas.

The NUPRC Chief Executive, Oritsemeyiwa Eyesan, gave the warning during a working visit to the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, in Abuja.

Eyesan explained that the Commission reviews the performance of awarded flare-gas projects after one year and would take regulatory measures against investors who fail to demonstrate sufficient progress.

She noted that such measures could include revocation of the affected awards where necessary.

Under the Nigerian Gas Flare Commercialisation Programme (NGFCP), 43 flare sites were initially identified, while 27 sites have so far been awarded to investors for development.

The programme was introduced to transform gas currently being burned as waste into an economic resource by enabling investors to capture, process and commercialise flare gas.

However, implementation has faced considerable delays, while inadequate infrastructure and commercial challenges continue to hinder efforts to eliminate routine gas flaring.

Available figures indicate that Nigeria produced about 4.132 trillion standard cubic feet of gas between January 2025 and June 2026. More than 3.823 trillion standard cubic feet was utilised during the period, while approximately 301.60 billion standard cubic feet was flared.

Based on the prevailing gas price, the flared volume was estimated to have a potential market value of about $888 million.

The World Bank’s Global Gas Flaring Tracker Report also listed Nigeria among the world’s leading gas-flaring countries in 2025, noting that the country’s flaring volume increased alongside higher oil production.

Industry observers have linked the persistent problem to inadequate infrastructure for transporting associated gas to domestic and international markets, as well as ageing processing facilities.

Nigeria currently has proven gas reserves of more than 215 trillion cubic feet (TCF), with the country’s overall gas resource base estimated at about 600 TCF.

Stakeholders have therefore called for a combination of stronger regulation, investment incentives and infrastructure development to tackle the problem.

Joseph Ambakederimo, Chairman of the Board of Trustees of the Community Development Committees of Niger Delta Oil and Gas Producing Areas, said captured gas could be deployed for power generation, industrial activities, compressed natural gas (CNG) and other commercial purposes.

He also supported stronger action against investors who fail to develop their awarded projects, while stressing the need to address infrastructure and economic barriers affecting gas utilisation.

Former President of the Nigerian Economic Society, Prof. Adeola Adenikinju, similarly argued that the government should consider incentives alongside sanctions.

According to him, the continued payment of penalties by companies suggests that investing in gas utilisation infrastructure may not always be commercially attractive, particularly for some marginal-field operators.

Environmental activist and Executive Director of the Health of Mother Earth Foundation, Dr Nnimmo Bassey, however, stressed that gas flaring should not be viewed solely as an economic issue.

He highlighted the environmental and health consequences suffered by communities in the Niger Delta as a result of prolonged exposure to emissions from oil and gas operations.

Meanwhile, Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, has urged regulators and industry operators to accelerate the implementation of gas commercialisation projects.

The Federal Government has set 2030 as its target for ending routine gas flaring, making the effective implementation of the commercialisation programme a key part of its strategy to achieve the goal.

The latest threat of licence revocation signals a tougher regulatory approach as authorities seek to move beyond collecting penalties and ensure that associated gas is captured and converted into productive economic value.