Upsetting the Offset - Transnational Institute

Upsetting the Offset
of proven reserves). Other reasons for this are to mask the real volume of
associated gas flaring, and most recently, to gain carbon credits.
Indeed, in the light of disclosures that Shell had overstated its proven
reserves in Nigeria to fraudulently boost is share value in the US and UK,
discrepancies in the figures presented above seem to reflect a more widespread
practice – wherein data disclosure on production figures serves business
strategy. 11
Gas Flaring and the CDM
As the local complaints about associated gas flaring became louder, oil
corporations and Nigerian National Petroleum Corporation (NNPC) have
occasionally presented bizarre claims and figures to show how they are acting to
reduce the problem. Most of these involve manipulation of associated and nonassociated
gas production volumes. For, example, in NNPC’s official data for
gas production and flaring in 2007, the actual mix of associated and nonassociated
gas is concealed – leading to a misrepresentation, as shown below.
Volume of
in BSCF
Gas produced in 2007 2,415.65
Gas utilized (for liquefied natural 1,626.10 (67.32%)
gas)
Gas flared 789.55 (32.68%)
Table 1: Nigeria Gas Flaring and Utilization (Source: Nigeria National Petroleum
Corporation 2007 Annual Statistical Bulletin) 12
While the above figures released by the government’s NNPC suggest that the
rate of gas flaring by all the oil companies operating in Nigeria was 32.68% in
2007, data that presents the volume of associated gas produced side by side
non-associated gas in a particular period would show a more accurate rate of
flaring.
With the dearth of complete data from the industry, my estimation based on
available crude oil production figures arrives at different figures. It is the
common understanding that every million barrel of crude oil produced in
Nigeria contains about a billion standard cubic feet of associated gas. In 2007,
the NNPC reports that the combined crude oil production was 803 million
barrels. This should contain about 803 billion standard cubic feet of associated
gas. Based on this estimate, we have presented an alternative table as a more
accurate estimate of volume and percentage of gas flaring in 2007.
Crude oil production in 2007
Estimated associated gas generated from crude oil
production in 2007
Total volume of gas produced in 2007 (sum of
associated and non-associated gas)
in BSCF
(unless otherwise stated)
803 mil barrels
803
2,415.65
91