Multinational operators in oil and gas industry have proposed to end all flares associated with oil explorations by 2010.

The Federal Government had set January 1, 2008, as the deadline to achieve zero flares in all oil fields in Nigeria.

The Area Manager, Nigeria, Exxonmobil Corporation, Ms. Kim Bates, made the proposal, while speaking on “Gaps in the Gas Development Chain: ExxonMobil Perspective.”

“The realistic flares down will be end of 2010,” she said.

Shell had originally proposed the 2007 deadline, which was adopted by the Federal Government after series of deadline extensions.

She argued that ending flares would require continued cooperation between the industry and government.

“The industry will not invest in infrastructure without the certainty that buyers will take the gas.”

Bates noted that, previously, the industry had not consciously explored gas because the technical challenges were enormous.

She said, “Gas development requires greater investment, training, compression and pipeline development to deliver gas to the market.”

She cited other challenges, that make the end of 2007 unrealistic to include security in the Niger Delta, pricing regime and funding for infrastructure development operators.

However, the Director, Department of Petroleum Resources, Mr. Tony Chukwueke, said that the Federal Government’s commitment to the issues involved. But he added that operators must pay penalty for flaring.

He insisted that the operators needed to cooperate with government on gas development.

According to him, “The solution to flaring is to do something now, or else the government is at risk of being unable to put teeth on its policies.”

He noted that the issues raised by the operators were not new and had existed even when the operators set the 2007 year end as the deadline for ending gas flaring.

According to him, “It is very difficult for the government to clamp down on operators without a rolling plan. All these issues have existed before now.

The NNPC funding didn’t start today; neither did the Niger Delta problems and pricing regime. The operators had all these in mind when they chose the deadline themselves and government adopted it.

“There must be a penalty for failure to meet the deadline and the industry must bear it.”

Chukwueke said the government was set to review the existing gas policy to improve revenue generation from activities of oil firms in the upstream sector.

He explained that the new policy would also make oil firms operating in the Niger Delta to dedicate associated gas being gathered from their oil fields to viable local projects within Nigeria .

This includes direct ownership of power generation plants, fertilizer plants for agriculture, supply of gas for the steel industry, distribution of gas to industries and residential estates.

He advised oil firms to stop negotiating for appropriate gas pricing that is beneficial to them, as a condition for investing in gas gathering projects that would deliver natural gas to power generation stations because there was the need to deliver dividend of the oil and gas industry to the people of Nigeria.