Nigeria grants 42 contracts as part of a delayed flaring program

Nigeria’s petroleum regulator announced on Wednesday that it has granted contracts to 42 companies as part of a program aimed at harnessing the gas produced as a byproduct of oil extraction.

The Nigerian government has estimated that flaring, the process of burning off gas, results in approximately $1 billion in annual revenue losses. Instead of being flared, this gas can be utilized in power generation, industrial processes, or exported.

The program, initially introduced in 2016 to auction rights for capturing and selling flared gas, encountered multiple delays and failed to meet its target of awarding the contracts by December 2022.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) announced that the winning bidders will be responsible for the development of 49 sites located in the oil-rich Niger Delta region. The commission did not disclose the names of the companies involved.

“Reserve bidders’ status has also been accorded some companies for the corresponding flare sites in case the preferred bidders fail to meet the terms and conditions stipulated,” NUPRC said in a statement.

According to environmentalists, gas flares pose health risks to communities in oil-producing areas and also contribute to global warming.

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