Nigeria is seeking to transform a long-standing environmental and economic problem into a source of investment, jobs, and cleaner energy. Regulators are working to unlock billions of dollars’ worth of gas that has been flared at oilfields for decades, turning waste into productive use.
The federal government says the Nigerian Gas Flare Commercialization Programme could attract up to $2 billion in new investment. This follows a step in the process, as the Nigerian Upstream Petroleum Regulatory Commission issued permits granting access to flare gas sites to 28 companies that have finalized commercial agreements under the scheme. The decision marks a move from policy intent to on-the-ground execution.
For investors and policymakers, the program serves as a test of Nigeria’s ability to balance energy transition targets with commercial realities in an oil-reliant economy. Gas flaring, the routine burning of associated gas during oil production, has long highlighted regulatory gaps, limited infrastructure, and lost economic value. Nigeria remains one of the world’s largest flaring countries, wasting gas that could supply households, industries, or export markets.
Gbenga Komolafe, chief executive of the NUPRC, said assigning flare sites to independent developers reflects a shift toward a commercially workable approach. He said the move allows environmental problems to be addressed through private investment. By enabling third-party operators to capture and sell flare gas, the government aims to end routine flaring while easing operational and financial pressure on oil producers.
The initiative aligns climate objectives with economic needs. Under Nigeria’s Energy Transition Plan, the country aims to reduce emissions while supporting growth and energy security. Regulators view gas as a transitional fuel that offers lower emissions than oil and coal. Capturing gas that would otherwise be burned delivers immediate emissions reductions while supplying fuel for power generation, fertilizer production, petrochemicals, and cooking gas.
The NGFCP has taken several years to reach this stage. The government first introduced the program before the pandemic, then restructured it following Covid-19 and the passage of the Petroleum Industry Act, which reshaped Nigeria’s oil and gas legal framework. Komolafe said the changes were designed to improve regulatory clarity and consistency, long-standing concerns for investors.
Interest in the program has been strong. About 300 companies initially submitted expressions of interest, 139 qualified to bid, and 42 were eventually awarded rights to 49 flare sites through a competitive process.
Regulators estimate that the program could capture between 250 million and 300 million standard cubic feet of gas currently flared each day. This could cut roughly 6 million tonnes of carbon dioxide emissions annually. The projects are also expected to produce about 170,000 tonnes of LPG each year, supporting cleaner cooking for around 1.4 million households and enabling close to 3 gigawatts of power generation capacity.
Beyond emissions reductions, the government expects broader economic benefits. Officials project that the projects could create more than 100,000 direct and indirect jobs across construction, engineering, operations, and downstream activities. In oil-producing communities, flare capture projects are promoted as a way to improve local livelihoods and address long-standing tensions linked to pollution and underdevelopment.
Oil producers also stand to benefit. Nigeria’s regulatory framework imposes penalties for flaring gas, and transferring flare sites to third parties allows producers to avoid these charges. It also helps reduce environmental liabilities and improve environmental, social, and governance performance, which has become increasingly important for international partners and financiers.
For investors, the program offers multiple revenue streams beyond domestic gas sales. These include carbon credits tied to emissions reductions, long-term gas contracts, LPG supply, and embedded power projects. NUPRC officials say engagement with international financiers and technology providers has increased, signaling renewed interest in Nigeria’s gas sector after years of declining investment.
Kelechi Ofoegbu, executive commissioner for corporate services and administration at the NUPRC, said the program deliberately blends commercial incentives with environmental requirements. He said the aim is to ensure flare gas is converted into economically viable products rather than becoming another wasted resource. He described the NGFCP as a clear break from past practices, designed to strengthen accountability and build investor confidence within a more modern regulatory framework.
source: businessamlive.com
African Energy Council