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Cameroon Hosts Gulf of Guinea Forum on Gas Flaring Reduction


In Washington, D.C.:
Ludi Joseph

Phone: +202 473 7700

E-mail:
ljoseph@ifc.org

Hannfried von Hindenburg

Phone:+202 458 5613

Email:
hvonhindenburg@ifc.org


Yaounde, Cameroon, February 7, 2005 — A regional forum on reducing gas flaring and venting in Sub-Saharan Africa was held in Yaounde on January 26-27, 2005.  The two-day event was hosted jointly by Société Nationale des Hydrocarbures of Cameroon and the World Bank on behalf of the Global Gas Flaring Reduction Public-Private Partnership (GGFR).

The Gulf of Guinea Forum on Flaring Reduction was the first effort dedicated to reducing gas flaring through the engagement and cooperation of regional stakeholders, using the collaboration principles developed by the GGFR. The forum sought to enable public and private sector stakeholders to find ways to attach a monetary value to flared and vented gas so that a commercial market for the commodity could be developed


Mr. Adolphe MOUDIKI, Administrator Director General of the Société Nationale des Hydrocarbures of Cameroon opened the Forum. Participants included high-level representatives from the ministries and companies of the oil and gas sector from Angola, Cameroon, Chad, Congo-Brazzaville, Nigeria, and Gabon.


The forum focused on domestic projects as well as cooperation on establishing regional gas infrastructures linking supply sources and markets in close proximity. The participants discovered significant common ground laying the basis for future cooperation and exchange of experience.  For establishing regional infrastructure, the main recommendation is to pursue a combination of projects and policy development to make a difference on the ground as quickly as possible in view of domestic needs, associated gas decline in Cameroon, and available liquefaction capacity in the region.


Implementation of the collaboration principles developed by the GGFR aims to cut venting and flaring significantly within five to ten years in the GGFR partnership by monetizing otherwise flared gas. Further reductions may be achieved if additional countries, companies, and institutions endorse and implement the collaboration principles.


Following up on the conclusions of the forum would lead to use of associated natural gas, spur the growth of regional gas markets, and reduce barriers to gas market access, as well as bring down greenhouse gas emissions from venting and flaring.  The implementation of the recommendations is expected to the deepening of sustainable development practices in the hydrocarbons sector.


BACKGROUND:


1.        The Issue: When crude oil is brought to the surface from several kilometers below, gas associated with such oil extraction usually comes to the surface as well. If oil is produced in areas of the world that lack gas infrastructure or a nearby gas market, a significant portion of this associated gas may be released into the atmosphere, unignited (vented) or ignited (flared).


The World Bank estimates that the annual volume of natural gas being flared and vented is over 100 billion cubic meters, enough to provide the combined annual gas consumption of Italy and France. Flaring in Africa alone could produce 200 Terawatt hours (TWh) of electricity, about 50 percent of the current power consumption of the African continent and more than twice the level of power consumption in Sub-Saharan Africa (excluding South Africa). This is also equivalent to more than 10 percent of committed emission reductions by developed countries under the Kyoto Protocol for the period 2008-2012. About 75 percent of global venting and flaring occurs in 10 countries, with the next 10 countries adding another 15 percent.


2.        History: In 2001, the Global Initiative on Natural Gas Flaring Reduction was initiated by the government of Norway and the World Bank Group to investigate the issue. It found that for the past 20 years, global flaring levels have remained virtually constant (although individual country levels have fluctuated), despite efforts made by individual governments and companies, and despite many successes in reducing flaring. The overall effect of these efforts has been limited due to (1) the increase in global oil production and associated gas production; and (2) major constraints hindering the development of gas markets, gas infrastructure, and flaring reduction projects, which often require a collaborative approach with key stakeholders taking complementary and supportive action.


3.         The GGFR Partnership: As a result of its findings, the initiative was transformed into the Global Gas Flaring Reduction Public-Private Partnership (GGFR) at the World Summit on Sustainable Development in 2002 in Johannesburg, to address the issue through collaboration. In addition to the World Bank Group, this public-private partnership currently includes BP, ChevronTexaco, ENI, ExxonMobil, Norsk Hydro, Royal Dutch Shell, Statoil, and TOTAL and the governments or national oil companies of Algeria, Angola, Cameroon, Canada, Chad, Ecuador, Equatorial Guinea, Indonesia, Nigeria, Norway,  The United Kingdom and the United States, with other companies and countries expected to join. The growing membership, now including OPEC, covers over 70 percent of the sources of venting and flaring globally.

       
4.        Objective and Activities of GGFR: The aim of GGFR is to support national governments and the petroleum industry in their efforts to reduce flaring and venting of gas associated with the extraction of crude oil. A three-year work program was approved beginning in January 2003, coordinated by a small team based at the World Bank. The GGFR work program focuses on four areas of activity to assist in the reduction of gas flaring and venting in its partner countries: (1) commercializing associated gas, including domestic market development and access to international markets; (2) developing legal and fiscal regulations for associated gas;(3) implementing the flaring and venting reduction standard that has been developed by the partnership; and (4) capacity building related to carbon credits for flaring and venting reduction projects. Supporting activities include data gathering, stakeholder consultations, and identification and dissemination of best practice (ref.
http://www.worldbank.org/ggfr).

5.        The Global Venting and Flaring Reduction Voluntary Standard: The standard provides guidance on how to achieve reductions in the venting and flaring of gas associated with crude oil production. Its focus is two-fold: to eliminate routine venting of associated gas and to eliminate or significantly reduce continuous flaring of associated gas. The standard encourages prioritization and allocation of resources to operations with the largest potential for venting and flaring reduction globally. Key elements include goals for achieving significant reductions in associated gas venting and flaring in the short term, as well as encouraging improvement over a longer time period.  The standard also provides guidance on monitoring and transparency and a recommended timeframe for adoption and implementation of its goals.


6.        How the Standard Was Developed: The partnership reviewed barriers to associated gas utilization and existing standards, regulations, policies, and best practices aimed at venting and flaring reduction. It then identified improvements and points of collaboration through extensive consultations with the oil and gas industry and the governments of countries where venting and flaring occur. The approach set forth in the standard is intended to go beyond the venting and flaring practices that are currently applied in many countries.


Why the Standard Will Make a Difference: The standard takes a collaborative approach, which is essential to overcome the constraints hindering viable flare reduction projects in many areas. When oil and gas producers and governments apply the standard, they will produce implementation plans that support gas utilization. These project- or country-specific plans will be linked through a consultation process with stakeholders, resulting in a coordinated, local partnership approach to associated gas venting and flaring. Key stakeholders include gas producers, major consumers, and the government. For a given project, additional stakeholders may include owners of gas infrastructure, financial institutions, and representatives of local communities.


The Role of the World Bank Group: As a key participant and sponsor of the Global Gas Flaring Reduction Partnership, the World Bank Group will actively promote and disseminate the Global Gas Flaring and Venting Reduction Standard as a best practice initiative for all oil production operations in which it is involved.