14 November 2017

Nigeria: House Committee Disputes Chevron's $15,000 Gas Flaring Claim

Abuja — The House of Representatives adhoc committee investigating revenue leakages in the oil and gas sector from January 2016 to January 2017 yesterday faulted claims by oil giant, Chevron Nigeria Limited, which claimed it flared only $15,000 worth of gas in its oil fields last year.

The committee had also queried the parameters used in gauging gas flared as well as who purchased the meter and determines the penalty.

It further demanded details of all sub-heads payment from the Department of Petroleum Resources (DPR) in a determined probe of revenue loses.

A member of the committee, Hon. Johnson Agbonayinma (PDP, Edo), who moved the motion necessitating the probe had pointed out that crude oil condensates have specified amount of royalty they attract, but wondered how Chevron arrived at the $15,000 paid for gas flared in 2016 and if they used meter to measure the quantity of gas flared.

He noted that even though the DPR had accused the IOCs of owing government, the metering system had become controversial.

But, a former Senator who is the Director in charge of Government Relations at Chevron, Gbenga Aluko, said the DPR usually measure and charge gas flaring penalties accordingly.

He noted that gas flaring by Chevron had since been reduced by 96 percent adding that whatever amount they have paid on the receipts were all generated by the DPR.

According to him, "The company is in a 60/40 joint venture with government, and every receipt seen here was given by the DPR."

Not satisfied, Agbonayinma asked: "You are telling us that you owe only $15,000 of gas flaring penalty and we are saying that how did you determine the quantity of gas you flared and who measured it?

He asked if the Chevron representative would agree with the panel that the $3.5cents being charged by the DPR for condensates production is meagre.

Aluko said he would be happier if the fee could come down than it is, as no business entity likes to lose money.

Agbonayinma then suggested that the DPR be asked to submit documents relating to Chevron so as to enable the committee ascertain the veracity of what had been presented.

The Committee Chairman, Hon. Jarigbe Agom Jarigbe (PDP, Cross River), submitted that the company needed to come with its technical team in attending to questions on the subject matter, adding that since some key documents were not yet available, the committee may be forced to move the public hearing since it cannot approach the issues without having all the facts available to it.

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