As the world moves toward net-zero emissions by the year 2050, oil and gas companies may face shrinking capital flows and mounting regulatory hurdles. Nigeria, Africa’s largest oil and gas producer, is expected to decarbonise its petroleum sector to maintain investor interest and support the development of clean energy technologies. This raises the question: What strategies and policies are currently being implemented to pursue this goal?
Nigeria’s Upstream Petroleum Emission Profile
Emissions in the upstream sector originate from various sources, categorised as direct, indirect, and product-related emissions. While emissions from purchased electricity, the petroleum supply chain, and the consumption of hydrocarbon products exist, most upstream emissions come from direct sources such as gas flaring, platform electricity generation, gas venting, and emissions from transporting vehicles and drilling fluids.
Gas venting is the direct release of unburned natural gas into the atmosphere during oil and gas production or processing. Venting may occur deliberately as part of operational procedures or unintentionally due to equipment malfunctions or fugitive emissions. In contrast, gas flaring involves the controlled combustion of associated gas to prevent the direct release of methane and other hydrocarbons. Flaring emits black carbon (soot) and other combustion byproducts, which, although short-lived, have a strong warming effect due to their high radiative forcing potential. Rather than being flared or vented, associated gas can be recovered, treated, and monetised as marketable natural gas, thereby reducing emissions and improving resource efficiency.
Despite its economic relevance, petroleum companies continue to flare and vent associated natural gas, releasing approximately 400 million tons of CO₂ per year. In Nigeria, there has been a fluctuating but overall decreasing trend in gas flaring (Figure 1) between 2013 and 2017. However, from 2018 to 2019, gas flaring increased to over 450 MSCF. Since then, it has generally trended downward, reaching its lowest in 2022. The decline from 2018 to 2022 could be attributed to lower crude oil production and efforts to reduce flaring through government policies. Nigeria has also signed the Global Gas Flaring Reduction Partnership (GGFR) whilst committing to national flare-out by 2025; nevertheless, flaring is still ongoing in the country. There has been an uptick from 2023 to 2025, indicating that challenges persist in eliminating the practice.
The Nigerian Oil Spill Detection and Response Agency reported that more than 16 million tonnes of carbon dioxide (MTCo2e) were emitted through gas flaring in 2024. This amount is equivalent to over 30,000 GWh of electricity—enough to power the entire country—and an emission-equivalent fine of over $600 million
GHG can also be emitted through combustion processes, like production, processing, drilling, liquefaction, and transportation. According to Fraser McKay in Is the Upstream Oil and Gas Delivering in Decarbonisation? (Wood Mackenzie), The largest amount of pollution (approximately two-thirds) comes from these combustion-related activities. Yet these sources of emissions are often neglected, while more emphasis is placed on gas flaring. In Nigeria, emissions from these sources are poorly tracked, managed, and accounted for, resulting in environmental challenges and economic costs.
Existing Policies and Frameworks
To drive decarbonisation and a safe shift to cleaner energy, Nigeria has adopted the following policies and frameworks:
- Petroleum Industry Act, 2021 (PIA): The PIA establishes a framework for managing oil and gas operations. It gives clear guidelines for enhancing hydrocarbon production and institutionalising long-term environmental responsibility. It also mandates emission reduction in line with global climate policies.
- Nigeria’s Gas Flare Commercialisation Programme (NGFCP): Formally launched in 2016 and relaunched in 2022, the NGFCP’s primary goal is to stop gas flaring by implementing gas utilisation projects. Third-party investors will handle these projects through a competitive and transparent bidding process. Commercialising flared gas will not only boost the economy through job creation and resale of captured gas, but also keep the environment clean and safe.
- Gas Flaring, Venting and Methane Emissions Regulations, 2023: Enacted under the PIA, 2021, to mitigate gas flaring, venting, and fugitive emissions across Nigeria’s upstream regulatory operations, it directs operators to develop flare elimination and monetisation plans, maintain detailed emission records, and adopt leak detection strategies. It permits the NUPRC to take flare gas at flare sites and penalise companies for non-compliance. This regulation strengthens the country’s decarbonisation framework, though effective enforcement remains a significant challenge.
- Climate Change Act, 2021: Also passed by the Buhari administration, the CC Act 2021 mandates the establishment of the National Council on Climate Change, the creation of the National Climate Change Action Plan, and the authorisation of a 5-year carbon budget. The National Council on Climate Change oversees all national climate policies and the administration of climate funds. Most importantly, it compels every entity with more than 50 workers to provide a carbon management plan with detailed measuring, monitoring, regulations, and verification processes, including the petroleum upstream sector.
The Nigerian hydrocarbon industry was regulated by the defunct Department of Petroleum Resources (DPR), PEF, and PPPRA. In 2021, DPR was split into the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) after the enactment of the Petroleum Industry Act, 2021, by the late President Muhammadu Buhari. The NUPRC regulates all upstream operations and businesses, playing a major role in decarbonising the sector. The NUPRC created a decarbonisation blueprint containing comprehensive guidelines to decarbonise the petroleum industry, leveraging seven key strategies, namely:
- The use of natural gas as a bridge fuel
- Zero flaring and methane abatement
- Carbon market development
- Technological innovation
- Operational efficiency
- Incentive mechanism
- Collaborative risk management
The promotion of natural gas as Nigeria’s transition fuel is expected to lead to the expansion of gas infrastructure, strengthened policies and regulatory frameworks, and the chance of eliminating gas flaring. Currently, the amount of gas flared during gas production has decreased from 7.38% in 2023 to 7.16% in 2025. Additionally, natural gas contains lower carbon content than coal and oil, and Nigeria has more than 210 TCF of proven gas reserves, ranking among the top 10 countries in the world. As a result, Nigeria has increased its daily gas production capacity by approximately 650 million standard cubic feet per day, compared to last year. The NUPRC has also introduced initiatives and policies, including the Gas Decade Initiative (2021-2030), the Nigerian Gas Policy, and the National Gas Expansion Programme. These initiatives will not only serve as policies but also mark a shift to a gas-based economy.
Aside from the Nigerian Upstream Oil & Gas Decarbonisation and Sustainability Blueprint, released in 2021, which outlined the key strategies mentioned above, the NUPRC created an upstream decarbonisation template in May 2025 and made it a prerequisite for upstream operators seeking licenses, permits, and other regulatory approvals. The Nigerian Upstream Decarbonisation Template serves as a framework for achieving the seven strategies above. All upstream industry operators are obliged to:
- Integrate decarbonisation strategies in upstream operations.
- Establish a measurable and time-bound greenhouse gas reduction goal.
- Compliance with the Gas Flaring, Venting and Methane Emissions Regulations, 2023.
- Implement methane management programmes, including leak detection and repair, operational optimisation, and the integration of clean energy sources throughout the project’s lifecycle.
- Creation of carbon management strategies such as carbon capture and storage, nature-based solutions and carbon offset programmes.
References
Adedeji, Z., Federal Inland Revenue Service, National Council on Climate Change, & Maduekwe, N. (2024). Carbon market activation policy. https://ossapcfse.org/wp-content/uploads/2025/04/Nigerias-Carbon-Market-Activation-Policy-Draft-020425.pdf
Alabi, M. (2022, September 26). Nigerian gas flare commercialisation programme. https://ngfcp.nuprc.gov.ng/about-ngfcp/
Deloitte. (2023, March 28). Decarbonization of oil and gas. https://www.deloitte.com/ng/en/Industries/energy-chemicals/perspectives/decarbonization-of-oil-and-gas.html
Ibrahim, A. (2024, January 30). Nigeria wastes $1bn of gas despite shortages for power plants. Businessday NG. https://businessday.ng/big-read/article/nigeria-wastes-1bn-of-gas-despite-shortages-for-power-plants/
