By Emameh Gabriel
The Federal Government has moved to revoke gas flare commercialisation awards held by investors who fail to develop their projects, as years of hefty penalties have failed to stop oil producers from burning off natural gas.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) issued the warning against the backdrop of N521.87 billion collected in gas-flare penalties in 2025, a massive revenue stream that has done little to end routine flaring.
NUPRC Chief Executive, Oritsemeyiwa Eyesan, disclosed the planned action on Thursday during a working visit to the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, in Abuja, where she presented an update on the Nigerian Gas Flare Commercialisation Programme (NGFCP).
Eyesan said the Commission reviews the performance of each award one year after it is granted and would act where investors fail to show meaningful progress.
“Where there is insufficient progress, the Commission will take appropriate regulatory action, including revocation of the award where necessary,” she said.
Under the programme, 43 flare gas sites were identified, with 27 so far awarded for development. The scheme was designed to turn flaring from an environmental liability into an economic asset by allowing investors to capture and commercialise the gas rather than simply penalising producers for burning it.
But the initiative has struggled. It faced a delay of over six years, and flaring has continued, depriving the economy of valuable energy resources while imposing environmental and health costs on oil-producing communities.
NUPRC’s 2025 figures show penalty collections swung wildly through the year. January brought in just N839 million against a monthly target of N58.32 billion, a paltry 1.44 per cent performance.
Collections jumped to N10.29 billion in February (17.64 per cent), then N55.20 billion in March (94.64 per cent). April fell to N30.41 billion, before May recovered to N42.99 billion and June surged to N68.94 billion, exceeding target by N10.62 billion.
July recorded N53.11 billion, August N59.42 billion, while September produced the year’s highest at N69.08 billion (118.46 per cent). October stayed above target at N61.90 billion, but November dropped to N51.84 billion and December closed at N48.86 billion.
In total, NUPRC collected N521.87 billion against an annualised target of about N699.84 billion, 74.57 per cent performance, leaving a shortfall of roughly N177.97 billion.
The third quarter was strongest at N191.55 billion (about 36.7 per cent of yearly collections), followed by the fourth quarter with N162.60 billion, the second with N142.34 billion, and the first with just N66.33 billion.
Between January 2025 and June 2026, Nigeria produced about 4.132 trillion standard cubic feet of gas and utilised more than 3.823 trillion, with an average flaring rate of 7.3 per cent.
That meant roughly 301.60 billion standard cubic feet was flared over the 18 months. At a prevailing gas price of $2.84 per million British thermal units, the flared volume is worth an estimated $888.24 million in market value, not revenue Nigeria could have earned immediately, since monetising associated gas requires gathering, processing and transport infrastructure, but a clear illustration of the opportunity going up in smoke.
The World Bank’s Global Gas Flaring Tracker Report listed Nigeria among the world’s nine largest gas-flaring countries in 2025, with flaring volumes rising eight per cent alongside an eight per cent increase in oil production.
The report blamed inadequate infrastructure for moving associated gas to domestic and export markets, as well as ageing processing facilities prone to disruption.
Nigeria’s proven gas reserves now exceed 215 trillion cubic feet, with a total resource base of about 600 TCF, yet the infrastructure to capture and monetise that gas has not kept pace with oil production.
Joseph Ambakederimo, Chairman of the Board of Trustees, Community Development Committees of Niger Delta Oil and Gas Producing Areas, said the problem needs broader intervention.
He listed infrastructure deficits, market incentives, regulatory enforcement and local gas-to-power and off-grid monetisation as critical gaps.
Ambakederimo argued that captured associated gas could feed captive power generation, industrial hubs and CNG, while small-scale processing plants could convert gas from remote fields into products such as LPG.
He described the NGFCP as having failed to deliver the results originally envisaged, and backed the threat to revoke licences where investors stall.
Former President of the Nigerian Economic Society, Prof. Adeola Adenikinju, said the economics of gas utilisation deserved greater attention. He questioned why companies would rather pay penalties than invest in gas-utilisation infrastructure.
“The real question is: why are companies willing to pay penalties rather than invest in gas utilisation infrastructure?” he asked.
Adenikinju noted that marginal-field operators face location and other constraints that make downstream gas investment difficult, and suggested a fund to finance gas-utilisation projects, with operators encouraged to pool resources and build shared infrastructure where individual projects are not viable.
Environmental activist and Executive Director of Health of Mother Earth Foundation, Dr Nnimmo Bassey, said the government had not shown sufficient commitment to ending flaring, describing successive deadlines as “shifting goalposts.”
Bassey said the issue goes beyond greenhouse-gas emissions, pointing to the health and environmental toll on Niger Delta communities, and questioned the continued burning of specific oil wells and the response to affected communities.
Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo, has urged regulators and operators to accelerate implementation of the commercialisation programme to meet Nigeria’s target of ending routine gas flaring by 2030.
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