Country
Assessment
The Emissions Regulations provide for the Commission to conduct competitive auctions in which third parties can bid for gas currently being disposed via flaring, venting, or waste. The NGFCP announced the first auction in November 2018. The NGFCP was relaunched in October 2022, to advance the government’s goal of achieving zero routine flaring within this decade. The NGFCP 2022 has been restructured to offer flare sites to technically and commercially competent third-party investors through a competitive and transparent bid process. The auction was closed in late March 2023 after several extensions of the submission deadline.
The Companies Income Tax Act, 1990 , provides incentives for the utilization of associated and nonassociated natural gas. Gas utilization is defined as the marketing and distribution of natural gas for commercial purposes and includes power generation, LNG, gas-to-liquid plants, fertilizer production, and gas transmission and distribution pipelines. Nigeria also adopted a gas transport network code in 2020, formalizing third-party access to critical gas infrastructure. The Petroleum Industry Act separates upstream, midstream, and downstream operations. Regulatory oversight of the upstream are transferred from the Department of Petroleum Resources to the Commission and regulatory oversight of midstream and downstream are transferred to the Authority (see section 6 of this case study), which has also assumed functions of the Petroleum Products Pricing Regulatory Agency, and the Petroleum Equalization Fund (Management) Board. Companies are required to create separate companies for each segment and acquire the necessary licenses from the Commission or the Authority. This structure and other provisions of the Petroleum Industry Act (see section 21 in this case study) are intended to promote natural gas production and utilization. According to Section 173 of the Petroleum Industry Act, the Authority will determine the domestic gas demand requirement for strategic sectors by March 1 of every year and inform the Commission of this requirement. As per Section 110, the Commission is responsible for ensuring compliance of every lessee and can charge a penalty of US$3.50 per million British thermal units for failure to comply. This penalty and implementation of the domestic gas obligation can be modified by the Commission according to the guidelines provided in Section 110 and other sections of the Petroleum Industry Act. As per Section 167, unless lessees sign agreements with buyers from the strategic sectors, the Authority will determine the domestic base price for gas, which “must be of a level to bring forward sufficient natural gas supplies for the domestic market on a voluntary basis by the upstream petroleum industry” under the Third Schedule of the Petroleum Industry Act. Under Section 39 of the Companies Income Tax Act, 2020, up to five years of tax holiday is available to developers of new gas pipelines.
No evidence regarding targets and limits could be found in the sources consulted.
The NPD under the Ministry of Petroleum Energy (MPE) is the key institution in charge of policy, regulation, and enforcement of gas flaring and venting. The Norwegian Ministry of Climate and Environment develops integrated climate and environmental policies. Its subordinated agency, the Norwegian Environment Agency, is the environmental regulator.
Section 9 of the Norwegian Petroleum Act, 1996 , requires oil and gas operations to be conducted in such a manner as to maintain a high level of safety. Section 4-4 of the law allows operators to flare associated gas in the quantities needed for operational safety. Section 2 (General Factors) of the Guidelines for Production Permit Applications (last updated in spring 2023; see footnote 13) suggests that cold venting for safety reasons for normal operations is also allowed.
Section 23 of the Regulations to Act Relating to Petroleum Activities, 1997 , requires the operator to apply to the MPE to flare or vent gas, with a copy of the application submitted to the NPD. Permits are issued for a period of one calendar year according to the Guidelines for Production Permit Applications. Upon application, the MPE specifies the quantity that may be produced, injected, or vented for fixed periods of time according to Section 4-4 of the Norwegian Petroleum Act, 1996 . The NPD ensures compliance with these quantities. Venting is usually allowed for safety reasons, start-up, or testing.
Section 4 of the Norwegian Petroleum Act, 1996 , requires oil and gas to be produced according to prudent technical and sound economic principles that mitigate the waste of petroleum resources. Toward that end, the licensee should continuously evaluate the production strategy and technical approach being used and adjust these as needed. Facts 2012– the Norwegian Petroleum Sector, 2012, illustrates several projects implementing opportunities to minimize gas flaring and venting. An example is the Goliat Project, centered on an oil and gas field located in the Barents Sea. The discovery well was drilled in 2000, and the field went into production in 2016. Associated gas has been re-injected or transported through a pipeline to Melkøya.
Section 48 of the Regulations to Act Relating to Petroleum Activities, 1997 , requires the operator to submit information to the NPD on the use, injection, flaring, and venting of natural gas. Such information should be based on metering as much as possible. The Measurement Regulations, 2001 , stipulate functional and compliance requirements, including reporting and documentation, related to the planning, design, construction, and operation of metering systems and equipment to measure and report the quantities of gas flared or vented in petroleum activities. The NPD approves the equipment and procedures. Section 29 of the Measurement Regulations, 2001, requires the reporting of carbon dioxide tax metering to support the payment of the carbon dioxide tax every six months (calculated per field or facility). Section 3 of the Comments to Regulations Relating to Measurement of Petroleum for Fiscal Purposes and for Calculation of CO2 Tax, 2018, holds the operator of each individual field or facility directly responsible for the duties placed with the licensees jointly pursuant to the Norwegian Petroleum Act, 1996 , and the CO2 Tax Act, 1990 . Such duties include the design, purchase, and operation of metering systems, associated reporting, and payment of tax. The CO2 Tax Act, 1990, authorizes the Ministry of Finance to issue additional provisions for the carbon dioxide tax and equipment requirements for metering, measurement methods, and documentation.
According to Section 10 of the Norwegian Petroleum Act, 1996 , noncompliance with an order issued pursuant to the law may result in a daily fine for each day of the violation. Section 10 subjects a willful or negligent violation to fines or imprisonment. As the Norwegian Petroleum Act, 1996, prohibits flaring in excess of what is needed for safe operations, these fines apply to such excessive flaring. Separately, a carbon tax is imposed on all gas flared or vented, and willful or negligent submission of incorrect or incomplete documentation or any other breach of provisions or decisions contained in or issued by virtue of the CO2 Tax Act, 1990 , is subject to a fine.
Section 10 of the Norwegian Petroleum Act, 1996 , imposes nonmonetary penalties, including the temporary suspension of activities, license revocation, and imprisonment of as long as two years for a willful or negligent violation. Willful or negligent submission of incorrect or incomplete documentation or any other breach of provisions or decisions contained in or issued by virtue of the CO2 Tax Act, 1990 , may result in imprisonment of up to three months.